UGRO Capital raises Rs 380 Cr from Dutch development bank to expand MSME lending
UGRO Capital has raised the funds through issuance of 38,000 senior, secured, rated, listed, redeemable and transferable non-convertible debentures, fully subscribed by Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.
MSME-focused datatech lending platform UGRO Capital Limited has raised Rs 380 crore through the issuance of 38,000 senior, secured, rated, listed, redeemable and transferable non-convertible debentures (NCDs), fully subscribed by Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), a Dutch entrepreneurial development bank.
According to a press release, this marks FMO’s third investment in UGRO Capital in less than three years, following NCD investments of Rs 250 crore in December 2023 and Rs 260 crore in February 2025.
In line with FMO's mandate, the proceeds will support lending to women-owned and women-led SMEs, youth-owned and youth-led SMEs, and rural SMEs. They will also contribute towards the financing or refinancing of eligible green projects aligned with FMO’s sustainability approach, it added.
The investment builds on UGRO Capital’s strategy to diversify its long-tenor institutional funding base and reduce dependence on the domestic banking system. The company has raised over Rs 1,300 crore in debt from development finance institutions and impact-focused investors in India and globally, including FMO, IFU (a Danish sovereign development fund), Asian Development Bank (ADB), Triple Jump, BlueOrchard, responsAbility, Calvert Impact Capital, Enabling Qapital, GMO, WaterEquity, and MicroVest, among others. These partnerships are focused on measurable social outcomes, with several investors returning for subsequent rounds.
UGRO’s social impact is independently assessed. Its Social Impact Report 2024-25, verified by Dun & Bradstreet India, maps the company’s portfolio to eight UN Sustainable Development Goals, covering decent work and economic growth (SDG 8), industry, innovation and infrastructure (SDG 9), reduced inequalities (SDG 10), gender equality (SDG 5), affordable and clean energy (SDG 7), good health and well-being (SDG 3), clean water and sanitation (SDG 6), and quality education (SDG 4).
UGRO Capital serves small businesses that have historically faced limited access to formal credit, including enterprises with annual turnover below Rs 3 crore, which lack the tax and audited records conventional lenders require. Through its proprietary GRO Score underwriting model, the company assesses borrowers using banking cash flows verified in person by branch staff, and lends against residential or commercial property at an average ticket of approximately Rs 18 lakh. About four-fifths of this Emerging Market portfolio is in Tier III geographies and beyond.
The company’s embedded merchant finance platform, GROx, provides working capital averaging around Rs 1 lakh to kirana stores, agri-input dealers, pharma distributors and other nano enterprises.