Listed fintech lender U Gro Capital lending to MSMEs has raised its first impact focused debt investment of Rs 138 cr from funds managed/advised by Switzerland based impact investor responsAbility. The transaction was structured in two legs – in the first leg, an INR 31 Cr equivalent USD-denominated ECB was raised which was followed by INR denominated NCDs totalling INR 107crs in the second leg, it said in a statement.
The non-bank lender said the ECB transaction was done via an innovative social bond structure created as a result of joint efforts of the Swedish International Development Agency (SIDA), responsiAbility and Dance bank to mobilise $177.5 million debt capital from private investors.
The lender said the ECB transaction was completed in record time of 3 months.
Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital said, “This partnership marks a milestone in our journey as we share a common vision of financial inclusion with responsAbility and we continue to expand our reach and scope. DFIs and impact investors are critical funding partners to help us bridge the MSME credit gap in India and with this transaction, we have been able to affirm impact investors’ confidence in our business model. This transaction opens up a new stream of debt financing for us as we continue to leverage our technology and credit expertise to service MSMEs across the spectrum through our multi-channel distribution model.”
Rudrashis Roy, Investment Officer – Financial Institutions Debt, responsAbility said, “India continues to be an important market for funds managed or advised by responsAbility and we are excited to work with a like-minded partner like U GRO Capital to improve access to finance in the country. We were impressed with the way U GRO Capital has been able to offer credit products across the entire MSME spectrum through a multi-channel distribution strategy and how it is trying to solve problems related to data availability and quality in MSME underwriting through the use of technology and data analytics.”
