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Central Bank of India and U GRO Capital sign co-lending agreement

By Leandra Monteiro

December 22, 2021

  • Co-lending Agreement
  • Credit Management
  • Digital Lending

U GRO Capital, Central Bank of India U GRO Capital, an NSE & BSE listed, MSME lending FinTech platform, announced that it has signed a co-lending agreement with Central Bank of India. Under this partnership, the two entities aim to disburse up to INR 10 billion to U GRO Capital’s varied MSME segments under its programs like Pratham, Sanjeevani, Saathi, GRO MSME and Machinery financing, in next 12 months.

The Co-lending arrangement with Central Bank of India will work towards providing formal credit to underserved MSMEs at affordable rates across all product categories of U GRO Capital. For the same, the bank will leverage U GRO’s digital technology platform driven by a Data Tripod of GST, Banking and Bureau, in addition to the company’s deep sectoral understanding and multi-channel distribution reach.

The collaboration has been enabled by U GRO Capital’s GRO–Xstream platform, which through APIs integrates with Banks on one side and with multiple FinTechs, Payments Platforms, NBFCs, NeoBanks, Market places and other digital platforms on the other.

GRO-Xstream empowers banks and other large financial institutions to deepen their distribution reach and service MSMEs across India through a wide array of transactions. U GRO Capital has formed marquee partnerships with upstream as well as downstream BFSI partners that are to be integrated on GRO-Xstream. At the initial stage, Banks would be co-lending through this platform with the loans originated by U GRO Capital’s distribution network, however in future other participants on the platform would also get access to capital through this platform.

Once fully operational, the GRO–Xstream platform would have the power to unleash and democratize MSME credit in India by leveraging Banks’ prowess on the liability side and U GRO Capital along with its origination partners as well as its underwriting engine on the assets side.

Speaking on the development of this partnership, Shri Rajeev Puri, Executive Director, Central Bank of India stated, “We believe this initiative will financially empower large section of MSME borrowers. We believe, Co–lending as a concept is picking up pace and would change the lending landscape of credit dissemination for MSMEs in India. This agreement is in line with the Central Bank of India’s objective to accelerate the credit to MSMEs in India and contribute towards the mission of Atmanirbhar Bharat by making credit available to MSMEs at an affordable cost.”

Speaking on this alliance, Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital said, “We are delighted to sign the MoU for a co-lending arrangement with the Central Bank of India. We are witnessing an inflection point in MSME lending with the enhanced utility of the Data Tripod – i.e. GST, Banking and Bureau. For the first time UGRO Capital is signing a Co – Lending arrangement for all the programs which include Pratham, Sanjeevani, Saathi, GRO MSME and Machinery Finance. It is expected that U GRO would do approximately Rs. 1000 Crores disbursements through this tie up in next twelve months.

Also, with this partnership, U GRO is now able to serve the entire spectrum of MSME borrowers across various interest rate buckets. Collaborations like these, will further catalyze the financial inclusion efforts for Indian MSMEs. This arrangement is a reaffirmation of our underwriting methodology and the belief that the bank bestows in our vision of solving the credit needs of the MSMEs, using sectoral expertise and technology. This partnership would not only benefit U GRO but eventually benefit all the other FinTechs and NBFCs which are integrated with our GRO – Xstream platform. We look forward to nurturing this relationship towards supporting more MSMEs to enable their revival and growth.”

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