Godrej Finance Partners with Muthoot FinCorp for MSME Loan Offering

Godrej Finance, a subsidiary of Godrej Capital, on September 18, 2025, entered into a co-lending partnership with Muthoot FinCorp. As per the news reports, the collaboration provides additional credit support to micro, small and medium enterprises (MSMEs), particularly in Tier-2 and Tier-3 cities.

Loan Structure

As part of the partnership, the companies will jointly offer loan against property products. The loans will range from ₹10 lakh to ₹75 lakh. The average loan size is expected to be around ₹15 lakh. These loans are to meet funding needs such as business expansion, working capital, or other enterprise requirements.

Risk Sharing Agreement

According to the arrangement, Godrej Finance will take 80% of the risk exposure, while Muthoot FinCorp will take the remaining 20%. The operational aspects of the loans, including underwriting, customer journey, and collections, will be managed by Muthoot FinCorp. Godrej Finance will ensure compliance with regulatory requirements through a jointly created policy framework.

Focus on MSMEs

The agreement is for extending financial access to MSMEs in smaller towns and cities. Businesses in these regions often face challenges in securing timely credit from formal institutions. The co-lending structure is intended to make loan access easier and quicker for this segment.

Statements from Companies

As per the news reports, Manish Shah, MD & CEO of Godrej Capital, stated, “Access to timely credit can make all the difference for a growing business, especially in Tier-2 and Tier-3 cities where it is needed the most. With our partnership with Muthoot FinCorp, we aim to bridge this gap for MSMEs by offering simpler, transparent, and faster lending solutions.” 

Read more: Muthoot Finance Infused ₹200 Crore into Muthoot Homefin to Aid Business Growth!

Conclusion

The tie-up between Godrej Finance and Muthoot FinCorp establishes a co-lending model that combines risk sharing, operational management, and compliance oversight. It is expected to improve credit flow to MSMEs in non-metro locations.

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