Launched on a pan-India level, the idea behind the partnership is to focus on priority sector lending, according to an exchange filing on Wednesday.
The interest rates offered would depend on the customer’s credit profile. Mahindra Finance would serve as the point of contact for these customers, as it would also manage loan servicing, according to the co-lending agreement.
The MSME sector will continue to be a key focus area. Mahindra Finance, as a non-bank financial company, primarily serves the rural and semi-urban markets.
The partnership also comes at a time when the company’s subsidiary, Mahindra Rural Housing Finance Ltd., is moving away from deep rural financing to more affordable financing.
In the second quarter, the company’s net profit reported a sharp decline of 48% to Rs 235.2 crore.
Shares of Mahindra Finance were trading 1.04% higher at Rs 247.90 apiece, while SBI stock was trading 0.38% higher at Rs 567.70 apiece, compared to a 0.22% decline in the benchmark NSE Nifty 50 as of 12.45 p.m.
