Listed-fintech lending platform U Gro Capital Ltd, on Monday announced that it raised $5 million via external commercial borrowings (ECB) from Liechtenstein-based EMF Microfinance Fund, AgmvK.
U Gro Capital plans to use the funds to extend credit to underserved business sections, the company said in a release.
Contributing to the UN Sustainable Development Goals (SDGs) that outline reducing inequality and promoting inclusive growth as key goals, the proceeds from this partnership will serve as a credit link for the micro, small and medium enterprises (MSMEs) segment of the country, the company added.
“Impact investors are critical funding partners to enable us bridge the enormous credit gap in India’s MSME sector. We will continue to leverage our technology and credit expertise to service MSMEs across the spectrum through our multi-channel distribution model,” said Nath, vice chairman and managing director, U GRO Capital.
U GRO Capital was founded by Shachindra Nath, who had quit as group chief executive officer at Religare Enterprises Ltd in 2016, post-acquisition of non-banking finance company Chokhani Securities along with merging another lending firm with it.
The company operates on an omnichannel distribution model, with both physical and digital presence. The company says that it uses GST, banking and bureau data coupled with sectoral analysis to provide capital access to small businesses.
U Gro Capital currently has 75 branches across nine states in the country. The firm aims to reach 250,000 MSMEs in the coming 4 years.
In February, U Gro Capital - which counts private equity firms ADV Partners, NewQuest Asia and IndGrowth as its backers - raised Rs 138 crore (around $18.5 million) as its first impact-focused debt capital from Swiss firm responsAbility in the form of $-denomiated ECBs worth Rs 31 crore and rupee-denominated NCDs amounting to Rs 107 crore.
Prior to the current round, U Gro Capital had raised nearly Rs 2,630 crore in equity and debt capital from private equity investors, family offices, banks and other financial institutions over the last three years.