The co-lending model (CLM) is widely acknowledged for its effectiveness in fostering strategic collaborations among
diverse lending partners and enhancing credit accessibility for underserved segments of the country. RBI’s CLM
guidelines mandate both banks and NBFCs to have a board-approved policy, setting out the broad framework, basis
which banks and NBFCs enter into co-lending arrangements.
The potential of the co-lending model to transform the priority sector is substantial. By enhancing customer reach and
harnessing the technological advancements of NBFCs, this model enables end users in remote locations to access
credit. Coupled with the robust financial backing from banks, it could fundamentally reshape the lending and
borrowing market within the priority sector.
