IDBI Bank and U Gro Capital ink a co-lending pact for MSME lending

With the agreement coming into force, both the entities will make lending to MSMEs easier.

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IDBI Bank and U Gro Capital have partnered for a co-lending agreement.

U Gro Capital, listed NBFC lending to MSMEs said, the co-lending arrangement will work towards providing formal credit to underserved MSMEs, at affordable rates.

It added that it has been building its GRO – Xstream platform, which through APIs integrates with Banks on one side and with multiple FinTechs, Payments Platforms, NBFCs, NeoBanks, Market places and other digital platforms on the other.

Once fully operational, the GRO – Xstream platform would have the power to unleash and democratize MSME credit in India by leveraging Banks’ prowess on the liability side and U GRO Capital along with its origination partners as well as its underwriting engine on the assets side, it said.

Suresh Khatanhar, Deputy Managing Director, IDBI Bank, jointly with Shri Rajeev Kumar, Executive Director Agriculture, MSME & Retail Banking, IDBI Bank, stated, “Co–lending as a concept would change the lending landscape of credit dissemination for MSMEs in India, U GRO’s platform has the capability of not only originating loans through its own distribution engine but also give access to multiple other FinTechs and NBFCs who through this integration can get access to capital.

Both said, “IDBI Bank is committed to accelerate the credit to MSMEs in India and contribute towards the mission of Atmanirbhar Bharat by making credit available to MSMEs at an affordable cost.”

Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital said, “We are delighted to sign the MoU for a co-lending arrangement with IDBI Bank. 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 catalyze the financial inclusion efforts for Indian MSMEs. This arrangement is a reaffirmation of the belief that the bank bestows in our vision of solving the unsolved credit needs of the MSMEs, using sectoral expertise and technology.”

Nath adds, “This partnership would not only benefit U GRO but eventually benefit all the other FinTechs and NBFCs which are integrated with our GRO – Xstream platform. We look forward to nurturing this relationship towards supporting more MSMEs to enable their revival and growth.”