U Gro Capital signs co-lending agreement with IDBI Bank to support MSMEs

The arrangement will provide formal credit facilities to small and medium businesses at affordable rates, in addition to Data Tripod, the platform's digital technology platform.
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Bombay Stock Exchange-listed lending platform for micro, small and medium enterprises (MSMEs), U GRO Capital, has entered into a co-lending partnership with IDBI Bank in order to provide formal credit facilities to small and medium businesses at affordable rates in addition to Data Tripod, the platform's digital technology platform.

U Gro is also in the process of developing Xstream — a platform that will integrate banks with several fintech companies, payment platforms, Non-banking Financial Companies (NBFCs), neobanks, and other digital lending marketplaces.

Initially, Xstream will enable banks to co-lend loans originating from U Gro's network. Later, other lending players can also get access to capital through this platform.

COVID-19 has brought inexplicable challenges for the MSME sector. The first and the second waves have put pressure on businesses and their road to recovery seems long and arduous.

According to a survey conducted by credit rating agency, Care Ratings, over 40 percent of the MSMEs were likely to borrow in the coming months.
Commenting on this development, Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital, said, "We are witnessing an inflection point in MSME lending with the enhanced utility of the Data Tripod – i.e. GST, Banking and Bureau. Collaborations as this, will further catalyse the financial inclusion efforts for Indian MSMEs."

U GRO Capital, formerly known as Chokhani Securities, is a BSE-listed NBFC established in 1993. U GRO Capital was established after Shachindra acquired Chokhani Securities and revamped its management team in December 2017. 

It is focused on addressing the capital needs of small businesses operating in select eight sectors by providing customised loan solutions. It has raised Rs 2,500 crore of capital from a diversified set of private equity funds like institutional investors and well‐known family offices.

Edited by Kanishk Singh

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