UGRO Capital raises USD 30 Million from ADB

UGRO Capital raises USD 30 Million from ADB

UGRO Capital, a leading DataTech NBFC focused on MSME lending, announced a significant milestone, having successfully raised ~INR 2,500 million through Non-Convertible Debentures (NCDs) from the prestigious Asian Development Bank (ADB). This investment underscores ADB’s unwavering commitment to fostering inclusive, resilient, and sustainable prosperity by supporting small businesses at the grassroots level.

UGRO had received financing of INR 2,500 million through Non-Convertible Debentures (NCDs) from FMO, the Dutch entrepreneurial development bank in December 2023 as well.

Over the past 5 years, UGRO Capital has played a pivotal role in bridging the credit gap within India’s MSME sector, providing credit to approximately 90,000 small businesses. A recent survey revealed that 94% of participants experienced business growth, with a remarkable 36% surge in employment post availing loans from UGRO. This tangible impact demonstrates UGRO Capital’s dedication to driving economic growth and job creation.

UGRO Capital has an asset under management of INR 83,638 million as of December 2023. Over the last 5 years, it has raised total of INR 91,378 million Equity and Debt from diverse institutional sources:

Source of Financing Number of Institutions INR in Million % of Financing
Equity Capital Raise   12,567 14% 
Private Equity 5 7,400 8%
Development Financial Institution 1 2,400 3%
FIIs / QIB through QIP 10 2,137 2%
Family Office / HNIs 44 630 1%
Debt Finance Raise   78,811 86% 
Banks (Public & Private) 30 19,338 21%
Other Domestic Financial Institutions 21 14,210 16%
Development Financial Institutions and Impact funds 7 7,615 8%
Co Lending, Co origination and Direct assignment/ securitization 22 37,647 41%

The above truly demonstrates UGRO’s ability to attract institutional equity investors and diversified debt providers across all categories of lenders which gives UGRO a path to create a large scalable financial institution serving the need of MSME borrowers in India.

UGRO Capital’s commitment to the Micro Enterprises of India, backed by its technology-driven credit expertise, has positioned the company as a reliable partner for global DFIs. This strategic diversity ensures that the NBFC’s liability remains well-distributed, not solely reliant on the Indian banking system.

Mr. Shachindra Nath, Founder and Managing Director of UGRO Capital, expressed his views on the collaboration, stating, “This transaction is a proof of UGRO 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 ADB 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.”

Suzanne Gaboury, ADB Director General for Private Sector Operations, emphasized the significance of the partnership, saying, “We are pleased to partner with UGRO Capital in their mission to empower MSMEs in India. MSME Finance is a key driver for financial inclusion, and UGRO Capital’s 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. 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.”

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Rabindra

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