Small business lender U GRO Capital expands to unorganised micro businesses; to lend up to Rs 15 lakh

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February 18, 2021 10:46 PM

Credit and Finance for MSMEs: U GRO also announced the expansion of its distribution network by adding 25 branches across Karnataka, Tamil Nadu, Gujarat, Telangana, and Rajasthan.

In January, the Noida-based firm turned unicorn after it bagged funding from MasterCard at a valuation of about $1.6 billion.U GRO has so far raised around Rs 920 crore from a diversified set of private equity funds like institutional investors and family offices.

Credit and Finance for MSMEs: Fintech startup for small business lending U GRO Capital on Thursday launched a dedicated lending channel — Gro Micro — for unorganized micro businesses in non-metro markets in the country. U GRO also announced the expansion of its distribution network by adding 25 branches across Karnataka, Tamil Nadu, Gujarat, Telangana, and Rajasthan. Small ticket loans to be offered to micro-enterprises will be secured against their property. Unsecured loans are likely to support firms in sustenance and stability in the post-pandemic era along with meeting their working capital needs to fix broken cash flows and expansion goals.

“Our internal study prompted us of an existence of an opportunity to connect with a large base of micro-enterprises, in select markets, who find themselves in tremendous need of financing, be it term loans or to overcome their working capital crunch.  One primary reason for the lack of credit access is their informal nature of operations,” Shachindra Nath, Executive Chairman and Managing Director of U GRO Capital told Financial Express Online.

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U GRO Micro would cater to SME borrowers such as Kirana stores, pharmacies, mess or restaurants, hair salons, etc. Rs 1 lakh – 15 lakh secured loans and Rs 50,000- 5 lakh unsecured loans would be offered for 1-9 years and 12-36 months’ duration respectively. The time for disbursal for secured loans would be 7-8 days and 3-4 days for unsecured loans

“Research suggests there exists an opportunity to connect with over 5 million registered MSMEs in target states, a large majority of them would be away from the urban centers…We have created business assessment frameworks for most dominant business profiles across chosen micro-markets, and rely on our strengths of data and technology to facilitate credit deeper into the ecosystem,” Nath added. U GRO has so far raised around Rs 920 crore from a diversified set of private equity funds like institutional investors and family offices.

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