U GRO Capital Limited is a BSE-listed technology-focused SME business loan platform. By providing specialised loan solutions, the organisation hopes to address the capital needs of small enterprises. Anuj Kumar Pandey, Chief Risk Officer and founding team member, spoke to TheSMEIndia.com about the impact of the second wave of the pandemic, loan demand, and the government’s participation in programmes.
In 2018, the firm began with the aim of ‘solving the unsolved’ to bridge the credit gap of SMEs with the goal of finding a technique that is scalable, scientific in approach, templated, and can demonstrate a structured way of bridging the gap and bringing a method to SME lending.
According to Anuj, consumer lending has changed, but SME lending has lagged behind in terms of technology, data science, and even mentality. The goal was to approach SME loans through the sector in which it operates and make the process as simple as possible so that MSMEs do not waste time.
Setting a new standard in corporate governance they initially acquired a publicly traded platform ‘Chokhani Securities’ which was renamed U GRO Capital. Currently, the organisation has 13 independent board members to oversee all regulatory requirements and ensure that the institution retains its character. After raising 950 crores, the company currently has an AUM of 1300 crores.
Out of the existing 180 SME sectors, the company strategically partnered with Crisil and chose eight sectors (three service oriented and five general) such as Auto components, Chemicals, Education, Electrical equipment and components, Food processing & FMCG, Healthcare, Hospitality, and Light engineering. The primary criteria for selecting industries were their size, prospects, the types of problems that the company can solve, and an assessment of the short and long term effects of government policies.
The company collaborated with CRIF High Mark Credit Information Services to create a score card to better forecast client behaviour in a specific area. The company has applied for a patent for the score card and is the first financial institution to do so.
According to Anuj, NBFCs must complement rather than compete with large institutions, which is why they have entered into co-lending tie-up partnerships with fintech aggregators and smaller fintechs, in addition to partnering with three large banks such as Bank of Baroda, State Bank of India, and ICICI to source customers for them.
He was also full of praise for the government, which has provided a lot of assistance to this sector, such as offering a moratorium, continuing it, extending the emergency credit line plan, loan restructuring, and so on. He also praised the Government scheme of GEMSahay, and as the Government has taken a giant step to promote Udyam to transform MSME into a digital model, he requested that benefits such as new markets, new opportunities, benefits of using digital payments reducing operational expenditure, optimisation cost be explained to the sector by re integration and re digitisation so that all the go-to-market strategies are understood.
Please watch the video for additional in-depth insights into the discussion.