Mumbai: Godrej Finance Limited (GFL), a subsidiary of Godrej Capital, has entered into a co-lending partnership with Muthoot FinCorp to expand LAP Credit for MSME borrowers in Tier-2 and Tier-3 cities.
The alliance is set to achieve disbursals worth ₹250 crore in FY26, focusing on bridging the credit gap for small and medium enterprises.
Partnership to Boost LAP Credit for MSME Access in Smaller Cities
Through this collaboration, Loan Against Property (LAP) ranging from ₹10 lakh to ₹75 lakh will be made available, with an average ticket size of ₹15 lakh.
Backed by Muthoot FinCorp’s extensive network of over 3,700 branches across India, the initiative will significantly improve MSME access to affordable and timely funding. Future plans include extending the partnership to gold loans and housing loans.
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Seamless Digital Framework for LAP Credit for MSME Borrowers
The co-lending arrangement integrates seamlessly with digital platforms to ensure faster loan approvals, greater transparency, and adherence to the Reserve Bank of India’s co-lending guidelines. Under the agreement, Godrej Finance will assume 80% of the risk, while Muthoot FinCorp will manage underwriting, collections, and customer lifecycle responsibilities.
Leadership Perspectives on LAP Credit for MSME Needs
Manish Shah, MD & CEO of Godrej Capital, stated: “Access to timely credit can make all the difference for growing businesses, especially in Tier-2 and Tier-3 cities. Our partnership with Muthoot FinCorp will help bridge the gap for MSMEs by offering simpler, transparent, and faster lending solutions.”
Shaji Varghese, CEO of Muthoot FinCorp, added: “MSMEs are the second-largest source of employment in India, but face persistent credit challenges. With our 3,700+ branches and Muthoot FinCorp ONE app, this partnership will ensure broader access to Loan Against Property solutions for MSMEs.”
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Expanding LAP Credit for MSME with Diverse Loan Products
Through GFL, Godrej Capital already provides a wide range of financial solutions, including Loan Against Property, Udyog LAP for smaller-ticket requirements, and unsecured business loans. The new partnership enhances these offerings, with a strong focus on high-potential MSME markets in North, South, and Western India.
As one of the few NBFC-to-NBFC co-lending initiatives in India, this alliance underscores a digital-first approach and marks a significant step in expanding LAP Credit for MSME lending across underserved regions.
