U GRO Capital specializing in MSME lending raises Rs 250Cr from FMO

U GRO Capital, a datatech Non-Banking Financial Company (NBFC) specializing in MSME lending, has secured approximately Rs 250 crore in funding (around $30 million) through Non-Convertible Debentures (NCDs) from FMO, the Dutch entrepreneurial development bank. 

Impact on MSMEs and Economic Growth

Over the past five years, U GRO Capital has extended credit to over 80,000 small businesses, significantly contributing to economic growth and job creation. A recent survey highlighted that 94% of businesses that availed loans from U GRO Capital experienced growth in turnover, and there was a 36% increase in employment post-funding.

Diversified borrowing 

U GRO Capital's borrowing profile is diverse, with about 20% of its total borrowings coming from Development Financial Institutions and Impact Funds globally. The company said that the diversification aligns with regulatory guidance and demonstrates its commitment to micro-enterprises in India. Notably, U GRO Capital was endorsed for its Impact Financing program in May 2023, securing Equity Capital of Rs 240 crore from IFU.

Technological innovation

U GRO Capital leverages its DataTech approach to offer innovative lending solutions like GRO Plus, GRO Chain, GRO Xstream, and GRO X applications. These platforms enable efficient and tailored financing options for MSMEs.

The company's AI/ML-driven GRO Score (3.0) credit scoring model is revolutionizing MSME credit in India. With significant equity capital raised and a goal to capture 1% market share in the next three years, U GRO Capital is poised for further growth.

Leveraging technology to service MSMEs

Shachindra Nath, Founder and Managing Director of U GRO Capital, commented on the collaboration, said, “This transaction is proof of U GRO Capital’s ability to forge partnerships with and attract funding from reputed global DFIs. We share a common vision of financial inclusion with impact funding organizations and are excited to collaborate with FMO to meet the diverse financial needs of India's underserved MSMEs. Impact investors are critical funding partners in enabling us to bridge India's massive credit gap in the MSME sector, and we will continue to leverage our technology and credit expertise to service MSMEs across the spectrum via our multi-channel distribution model.”

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