UGRO Capital is India’s largest small business financing platform, says Nath
Denmark’s Investment Fund for Developing Countries (IFU) has invested DKK 200 million in UGRO Capital, a lending platform for small businesses in India for Micro, Small and Medium Businesses (MSME) that are one of the strongest drivers of economic development, innovation and employment.
The investment will assist UGRO Capital in growing their business and increase focus on providing lending that supports the green transition, said IFU, which has made the investment on behalf of the Danish SDG Investment Fund that is backed by large Danish pension funds and private investors.
“It has been our endeavour to change the life of small businesses, and having a global development financial institution like IFU as a partner is helping us achieve our mission at an accelerated pace,” said Shachindra Nath, Vice Chairman and Managing Director, UGRO Capital.
Access to finance is frequently identified as a critical barrier to growth for MSMEs, he noted, adding that UGRO Capital, acknowledging that small businesses need funding to develop their businesses creating economic growth and new job opportunities for people.
The company has close to 46,000 customers, a total loan portfolio of DKK 5.1 billion, more than 1,700 employees and 98 branches.
“UGRO Capital was envisaged to be built as India’s largest small business financing platform, combining the power of Data & Tech, and was uniquely created as India’s first listed startup in 2018. This is our second equity capital raise since inception, and we intend to gain 1% market share with 1 million small businesses,” Nath said on 21 June 2023.
“We are very pleased to become investor in UGRO Capital, which we believe is a well driven and technologically advanced financial institution having a solid impact by providing business loans to smaller businesses in India,” said Deepa Hingorani, Senior Vice President in IFU.
IFU is investing DKK 200 million in share capital assisting UGRO Capital in growing their business and increasing impacts that so far have supported more than 300,000 jobs. As part of the investment, it has been agreed to develop and implement a climate finance strategy framework as well as climate-related loan products that will support the green transition.
“One of IFU’s main strategic goals is to assist countries and companies in building green and inclusive societies that will reduce greenhouse gas emissions and improve resilience towards climate change,” said Rohit Goyal, Investment Director in IFU.
By developing a climate finance strategy as part of our investment in UGRO Capital, we are introducing a new set of instruments that will improve the opportunities for smaller businesses in greening their operations and supporting the green transition in India,” he said.
The investment is also in line with the green strategic partnership between India and Denmark that was signed by Prime Minister Narendra Modi and Prime Minister Mette Frederiksen two years ago. On that backdrop, IFU has received additional funds to invest in climate-related and green projects in India.
“IFU has invested in more than 100 companies in India, and we have a prioritised sector approach towards renewable energy and green infrastructure, financial services, healthcare as well as sustainable food with current investments representing all sectors in the country.
“India is expected to continue being a significant investment destination for IFU in the coming years,” said Hingorani.
The investment is made on behalf of the Danish SDG Investment Fund, which is a DKK 5 billion public-private partnership backed by large Danish pension funds and private investors.
Investment Fund for Developing Countries, is a Development Financial Institution owned by the Government of Denmark. IFU is a self-governing, state-owned fund, whose objective is to promote economic and social development in developing countries. fiinews.com
