UGRO Capital is investing Rs 250 crore ($30 million) to develop its technology and credit expertise to offer multi-channel services to MSMEs across various sectors, for which it has raised fresh round of capital.
The credit gap for MSMEs in India, which is estimated to be around Rs 20-25 lakh crore. MSMEs contribute 30% to India’s GDP, and bridging the credit gap is pivotal for sustaining and amplifying India’s growth story. The Indian government is also considering measures to boost MSMEs, including providing low-cost credit, which is a major obstacle to their growth.
“MSME Finance is a key driver for financial inclusion, and our mission to solve the small business credit need is in line with our vision of promoting inclusive and sustainable prosperity in Asia and the Pacific,” said Suzanne Gaboury, ADB Director General for Private Sector Operations.
“We are confident that together we will positively impact the lives of MSME borrowers. This collaboration is consistent with our commitment towards greater financial inclusion in India,” Gaboury added.
UGRO Grows with 90,000 small businesses
Over a period of 5 years, UGRO has lent to around 90,000 small businesses. UGRO Capital is a datatech lending platform listed on the NSE and BSE and aims to solve the small business credit gap in India.
UGRO’s data analytics and technology architecture enables customised sourcing platforms for each channel, including GRO Plus, GRO Chain, GRO Xstream, and GRO X application, it said in a statement. The company is backed by institutional investors and aims to capture a 1% market share over the next three years.
The Small business-focused fintech firm has cornered an asset under management of Rs 8,363 crore as of December 2023, and has raised Rs 9,137 crore in equity and debt over the past five years. In December 2023, UGRO secured Rs 2,50 crore in financing from FMO, a Dutch entrepreneurial development bank.
The fresh round of capital raised by UGRO Capital was through Non-Convertible Debentures from the Asian Development Bank (ADB).
