Co-Lending ? will be the marketplace for borrowers and lenders? Co-lending Co-lending or co-origination is a set-up where banks and non-banks enter into an arrangement for the joint contribution of credit for priority sector lending. To put it simply, under this arrangement, both banks and NBFCs share the risk in a ratio of 80:20 (80 percent of the loan with the bank and a minimum of 20 percent with the non-banks) How does a co-lending model work? In simple terms, banks will lend to NBFCs, and NBFCs will pass it on to the priority sectors, since they have a greater reach. NBFCs will be the single point of interface for the customers and enter into a loan agreement with the borrowers. The agreement should contain the features of the arrangement and the roles and responsibilities of NBFCs and banks.The ultimate borrower would be charged an all-inclusive interest rate. Considering the lower cost of funds from banks and greater reach of NBFCs, the primary focus is ...