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Online lending platform U GRO turns profitable in 1st year of operations

Sachindra Nath, Founder, U GRO

India’s FinTech player U GRO Capital is one of the few online lending players that has taken the holy grail of the business very seriously. The listed entity, which provides credit to small businesses, has achieved profitability in the first year of operations itself.

Despite a negative macro-economic sentiment and the ongoing NBFC crisis in the country, the Mumbai-headquartered lending platform, backed by Sachin Bansal, reported a profit (PAT) of INR 69 million in the third quarter of the financial year 2020 (Q3FY20) as against a loss of INR 200 million in the previous quarter same year. Its total income increased by 15% at INR 237 million in the quarter ending December 31, 2019, as against INR 205 million in the previous quarter.

Shachindra Nath, Managing Director of U GRO Capital, stated, “Q3 FY20 saw a continuation of the accelerated technological aspirations and conservative underwriting strategies we implemented in Q2, with excellent results. We are extremely proud of becoming the first fintech platform to achieve profitability within a year of commencing business operations.”

He further added that the company’s credit underwriting continues to be conservative in response to rising NPAs in the market. “We are seeing the fruits of this approach as portfolio performance continues to be excellent with GNPA at <0.1%. Maintaining this quality is of paramount importance, not only for the asset side but also to provide liability sources with comfort in lending to us. Looking forward, it is clear that we are on the right track – and we need to work even harder to forge a reality where we fulfill our mission statement of solving India’s SME credit problem,” Nath added.

The company also crossed some milestone numbers during the quarter. It’s loan disbursals crossed INR 10 billion and the AUM stood at INR 7.5 billion. It also launched a beta version of GRO-Direct, its proprietary Direct-to-Customer platform.  The GRO Partner network (DSAs) now stands at 311 partners, a 34% increase on Q2 FY20

Formerly known as Chokhani Securities, U GRO has recently announced a co-origination partnership with ICICI Bank for loans along with public banks– SBI and Bank of Baroda. The company has raised over INR 9.2 billion of capital from a diversified set of private equity funds like institutional investors and well-known family offices.

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