MAS Financial, UCO Bank collaborate to expand credit flow to underserved markets

MAS Financial Services Limited (MAS Financial), a key player in the MSME financing space, has announced a strategic co-lending partnership with UCO Bank. The collaboration, disclosed in a press release dated October 21, 2024, aims to extend loans to micro, small, and medium enterprises (MSMEs) under priority sector lending norms.

The partnership’s objective is to broaden MAS Financial’s client base while enhancing its liability management. UCO Bank, with its vast banking network, and MAS Financial’s specialized expertise in MSME financing, aim to leverage their strengths to provide credit access to underserved markets. This move is expected to increase the flow of credit to small enterprises that often struggle with financial support, further bolstering India‘s economic backbone—the MSME sector.

According to Ankit Jain, Chief Financial Officer of MAS Financial, the partnership aligns with their mission of excellence and is designed to enhance the reach of credit facilities to previously unserved markets. The co-lending model enables both entities to distribute loans efficiently while sharing risk and revenue, allowing a scalable approach to priority sector lending.

MAS Financial, listed on both the Bombay Stock Exchange (BSE: 540749) and the National Stock Exchange (NSE: MASFIN), expects this partnership to strengthen its financial position and increase its market reach. Meanwhile, UCO Bank’s established infrastructure will support this expansion, enabling MAS Financial to access untapped regions and customers.

The move follows a growing trend in India’s financial sector, where non-banking financial companies (NBFCs) and banks collaborate to pool resources for greater outreach. This strategic partnership is particularly aimed at targeting the credit needs of MSMEs in compliance with regulatory requirements. It marks a significant step in the evolution of financial services targeted at India’s vital small and medium-sized businesses.

Expert Insight: Expanding Credit Access Through Collaboration

Financial analysts suggest that such co-lending partnerships can serve as a catalyst for MSME growth, which is crucial for economic stability. The collaboration between MAS Financial and UCO Bank is expected to leverage UCO Bank’s vast reach and MAS Financial’s niche expertise, ensuring a streamlined credit disbursement process. By pooling their resources, both entities aim to reduce operational costs and risks while maximizing the lending potential in priority sectors.