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SBI on Wednesday said it has signed an agreement with three non-banking finance company-microfinance institutions (NBFC-MFIs) for co-lending to Joint Liability Groups (JLGs).

The country's largest lender has signed the pact with Vedika Credit Capital Ltd (VCCL), Save Microfinance Pvt Ltd (SMPL) and Paisalo Digital Ltd (PDL).

The agreement is for co-lending to individual members of JLGs to undertake agriculture and allied activities including other income generation activities, a release said.

"We believe this initiative will financially empower millions of people and will augment the bank's vast distribution network. This will also encourage entrepreneurship among the underserved population which in-turn will provide a boost to the Indian economy," SBI Chairman Dinesh Khara said.

With these partnerships, the lender would be able to further increase its reach in rural and semi-urban areas by offering small ticket loans, the release said.

It is actively looking at co-lending opportunities with multiple NBFCs / NBFC-MFIs for financing farm mechanisation, warehouse receipt finance, farmer producer organisations (FPOs) and for enhancing credit flow to double the farmers'/individuals' income, it added.

The RBI had issued guidelines on co-lending scheme for banks and NBFCs / NBFC-MFIs for priority sector lending to improve the flow of credit to unserved and underserved sectors and make funds available to borrowers at an affordable cost.

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