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U Gro Capital tie-ups with Bank of Baroda to lend to SMEs; raising Rs 75 cr from Sachin Bansal, Poonawalla

Sandeep Soni

Credit and Finance for MSMEs: Small business lending platform U Gro Capital, launched last year, has partnered with public sector lender Bank of Baroda to provide co-originate loans to SMEs. U Gro Capital is also "in the process of raising around Rs 75 crore from Sachin Bansal through non-convertible debentures and from Poonawalla Finance (part of Cyrus Poonawalla Group) via securitisation," Shachindra Nath, Executive Chairman, U Gro Capital confirmed to Financial Express Online.

U Gro has developed a co-lending platform Gro-Xstream to allow banks and large financial institutions to choose customers as per their criterion. It also helps small NBFCs to co-lend with U Gro along with "facilitating securitization and direct assignment opportunities for assets originated by them and filtered and assessed by U Gro Capital's analytical proprietary tool," the company said.

"Co-lending is a part of U Gro Capital's core liability strategy. Our aim is to offer credit access to small businesses in India in partnership with a large bank, leveraging our deep sectoral underwriting capabilities. We are committed to making a success out of the co-lending partnership with Bank of Baroda," Nath said.

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U Gro claimed of helping SMEs in getting an in-principle decision for their loan applications within 60 minutes of loan request based on its SME sector-focused "statistical scorecards and underwriting insights as per deep sub-sector level research". U Gro said that it has so far disbursed over Rs 600 crores in loans to more than 6,000 small enterprises in 10 months.

"We have entered into these MOUs with a view to enhance our footprint in delivery of products and services in the MSME ecosystem," V. S. Khichi, Executive Director of Bank of Baroda said in a statement. Bank of Baroda had last week announced a similar co-origination tie-up with NBFC Paisalo Digital to lend to MSMEs and agribusinesses.

Co-origination tie-ups with NBFCs and banks are part of U Gro's three-pronged liability strategy. This is combined with balance sheet lending and an "off-balance sheet model including assignments/securitization," the company said. U Gro had earlier raised around $140 million from multiple foreign PE investors including Samena Capital, PAG, ADV Partners and NewQuest along with public market investors such as Abakkus, PNB Metlife and multiple Indian family offices.