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UGRO Capital plans to raise $40m to support last-mile Indian MSMEs

By Gloria Mathias

October 21, 2024

  • Asian Development Bank (ADB)
  • co-lending
  • Equity Capital
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U GRO Capital, Mastercard, Financial Solutions, SMEs, SMBs, Fintech news, Underwriting solutions, Loans, Lending, Women Entrepreneurs, India News, India Fintech News, MSME solutions, Equity Capital, Fintech funding, MyShubhLife, Fintech News, Fintech India, SIDBI, MSME Funding, Co-lending, MSME India, Fintech India News, Indian MSMEs,UGRO Capital, a DataTech NBFC focused on MSME lending, has announced a milestone to bridge the credit gap in India’s MSME sector.

The firm signed a commitment letter with the United States International Development Finance Corporation (DFC) for a $40 million (approx. INR 3300 million) loan. The United States Agency for International Development (USAID) is supporting this transaction by committing its staff resources and linking its technical programs to support inclusive and sustainable economic growth.

This investment marks a step in UGRO Capital’s journey to empower small businesses at the grassroots level and deepen financial inclusion across the country.

The company has already raised INR 2,500 million each through Non-Convertible Debentures (NCDs) from the prestigious Asian Development Bank (ADB) in January 2024 and FMO, the Dutch entrepreneurial development bank, in December 2023.

DFC’s support will enable UGRO Capital to bolster its lending efforts to small and medium-sized businesses across India, with a focus on empowering women-owned enterprises. Approximately 70% of the funding will be directed to 2X qualifying businesses (women-owned or led), and at least $5 million of the proceeds will support new-to-credit borrowers, with the backing of the CGTMSE Guarantee.

This partnership with DFC reinforces the company’s ability to attract international capital and align with impact-driven global financial institutions to serve India’s vast MSME sector.

Shachindra Nath, Founder and Managing Director of UGRO Capital, shared, “We are honoured to receive this endorsement from DFC, an esteemed organisation committed to fostering financial inclusion globally. This transaction is a testament to UGRO Capital’s ability to forge meaningful partnerships with reputed global DFIs. Our shared vision of financial empowerment and inclusive growth drives us forward. With DFC’s support, we will be able to further our mission of addressing every need of every MSME, especially women-owned businesses and new-to-credit borrowers.”

Justin Andrews, DFC’s Acting Vice President of Small Business & Financial Services, stated, “Access to finance for new-to-credit borrowers and MSME finance is a key driver for financial inclusion, and we are thrilled to be working with UGRO Capital to address the credit needs of small businesses aligned with our goal of supporting economic growth and financial access in underserved communities. This partnership will play a crucial role in advancing the growth of MSMEs and promoting gender equality through 2X qualifying businesses.”

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