Credit and Finance for MSMEs: Debt marketplace Yubi (earlier CredAvenue) on Wednesday announced its partnership with small business lending platform U GRO Capital for co-lending and supply chain finance to address the credit gap in the MSME ecosystem. The company said it would integrate its co-lending platform Yubi Co.Lend and supply chain finance platform Yubi FLow with U GRO’s co-lending platform GRO Xstream and supply chain finance platform GRO–Line. Yubi said it has over 750 lenders and has facilitated debt volumes of over Rs 1 lakh crores so far. Through this alliance, U GRO will have access to Yubi Co.Lend’s network of banks, financial institutions and fintechs via a single API integration to extend credit to MSMEs.
“We are working towards accelerating financial inclusion in the country through a technology-driven credit infrastructure that powers discovery, execution and fulfilment. We are elated to partner with U GRO Capital with a shared vision to bridge the MSME credit gap in India by providing credit access to the unserved and underserved sectors in the country,” said Gaurav Kumar, Founder and CEO of Yubi in a statement.
Through various partners on Yubi Co.Lend, the company said it would co-lend over Rs 2,000 crore in MSME financing by March 2023. Yubi added that it has helped in establishing more than 50 partnerships between originators and banks such as State Bank of India and Yes Bank on its platform with over Rs 5,000 crores worth of disbursements and 80,000 transactions per day in FY22.
The co-lending or co-origination model by the Reserve Bank of India (RBI) is essentially about the collaboration of two financial institutions including banks and non-banking financial companies (NBFCs) to provide loans jointly.
“With our data-tech approach, we were able to head-start co-lending partnerships with top national banks. What started as an experiment, co-lending, has gathered momentum and acceptance across the industry. The scale of big banks combined with the agility and reach of nimble partnerships is going to be the bedrock of the transition of the lending industry,” said Shachindra Nath, Vice Chairman and Managing Director, U GRO Capital.
Meanwhile, bank credit to micro and small enterprises (MSEs) grew 23.7 per cent in June 2022 to Rs 14.29 lakh crore from Rs 11.55 lakh crore deployed in June last year and Rs 11.62 lakh crore in June 2020, latest data by the RBI on sectoral deployment of bank credit showed. Overall bank credit deployed to the MSME sector in June was Rs 17.93 lakh crore.