Bank of Baroda (BoB) has signed a co-lending agreement with IIFL Finance to expand credit access for agricultural and allied activities. The partnership aims to combine BoB’s low-cost funding strength with IIFL’s deep rural reach, delivering faster, more affordable loans to small borrowers. The collaboration is also expected to leverage technology-driven processes for smoother customer experiences.
Core Development
Under the arrangement, IIFL Finance will originate and service loans, particularly gold-backed lending.
BoB will participate in funding, with both institutions jointly underwriting.
The partnership focuses on farmers, small businesses, and rural borrowers, aiming to reduce barriers to credit.
The initiative reiterates efforts to build a resilient co-lending ecosystem by combining bank liquidity with NBFC reach.
Key Drivers / Issues
Addressing credit gaps in rural and semi-urban markets.
Rising demand for gold-backed agricultural loans.
Push for bank-NBFC collaboration to deepen financial inclusion.
Leveraging digital tools for faster loan disbursal and servicing.
Stakeholder Impact
For borrowers, the tie-up promises quicker, affordable loans for agricultural needs. BoB strengthens its outreach to underserved segments, while IIFL expands its footprint with the backing of a strong capital partner. Policymakers benefit from enhanced credit penetration into rural sectors, supporting farm productivity.
Industry & Policy Reactions
Kirti Timmanagoudar, IIFL Finance: Highlighted the partnership’s role in expanding access to underserved markets with competitive rates and tech-led delivery.
Madhur Kumar, BoB: Emphasised the bank’s focus on using collaboration and technology to create a more inclusive lending ecosystem.
Challenges Ahead
Ensuring timely servicing and maintaining asset quality in rural lending.
Aligning risk frameworks between bank and NBFC partners.
Managing gold price volatility, which underpins collateral value.
Strategic Outlook
The BoB–IIFL alliance reflects a larger trend of co-lending partnerships aimed at bridging India’s rural credit gap. With agriculture remaining central to the economy, such collaborations will play a key role in advancing financial inclusion and sustainable rural development.
Why This Matters
The partnership underscores the importance of bank-NBFC collaborations in expanding rural credit access. It highlights how leveraging strengths—bank liquidity and NBFC reach—can drive inclusive growth in agriculture finance.
