U GRO Capital and State Bank of India join hands to provide MSME loans

The agreement between U Gro and The State Bank of India would extend lending offerings under U GRO's Sanjeevani programme, which will provide loans up to ₹ 3 crores at a competitive interest rate.

U GRO Capital, a publicly traded MSME lending fintech firm, on Wednesday announced a co-lending agreement with State Bank of India (SBI) to provide financing to micro, small, and medium businesses (MSME) and hope to distribute up to ₹ 500 crores by March 2022 as a result of this agreement.

The deal was signed in accordance with the Reserve Bank of India’s new co-lending rules’ alternative option, which involves a back-to-back takeover of the bank’s part in the loan after disbursement. On the liabilities side, SBI’s expertise will be leveraged, while on the assets side, U GRO Capital’s origination and unique underwriting engine skills will be utilised.

The agreement would extend lending offerings under U GRO’s Sanjeevani programme, which will provide loans up to ₹ 3 crores at a competitive interest rate. Earlier, U GRO Capital had launched ‘Sanjeevani’ as an end-to-end digital financing programme to give loans to pandemic-affected MSME businesses, and as of October 31, 2021, it had already funded over ₹ 750 crores.

The relationship was hosted on U GRO Capital’s GRO–xStream platform, which interfaces with Banks on the one hand and different FinTechs, Payments Platforms, NBFCs, NeoBanks, Market Places, and other digital platforms on the other using APIs. U GRO has also onboarded over 15 FinTech / NBFC partners on the asset side and Banks on the liability side. With this cooperation, U GRO has cemented its position as the first NBFC to be accepted as a co-lending partner by Bank of Baroda, IDBI Bank, and now SBI in the fast-evolving co-lending ecosystem.

Dinesh Khara, Chairman of the State Bank of India, said on the occasion, “We are glad to have joined hands with U GRO Capital under the co-lending program. This collaboration will further enhance our distribution network, as we aim to extend our credit reach to more MSMEs. Such partnerships align with our commitment to accelerate effective and affordable credit to MSMEs in India and contribute to the country’s financial inclusion imperative towards building an Atmanirbhar Bharat.”

U GRO Capital’s Executive Chairman and Managing Director, Shachindra Nath, stated, “India’s lending landscape for NBFCs is transitioning, we believe that next decade is all about collaboration between large banks and niche NBFCs / FinTech wherein ‘Lending as a Service’ would become the prominent force.