UGRO Capital Plans to Raise $40M to Support Last-Mile Indian MSMEs

UGRO Capital, a DataTech Non-Banking Financial Company (NBFC) focused on MSME lending, has taken a significant step toward addressing the credit gap in India’s MSME sector. The company has secured a $40 million loan commitment from the United States International Development Finance Corporation (DFC). This investment is part of UGRO Capital’s broader mission to empower small businesses at the grassroots level and enhance financial inclusion across the country.

The transaction is supported by the United States Agency for International Development (USAID), which is dedicating staff resources and technical programs to help foster inclusive and sustainable economic growth through this collaboration. This partnership underscores UGRO Capital’s growing ability to attract international capital and align with impact-driven financial institutions to serve India’s expansive MSME sector.

Prior to this, UGRO Capital successfully raised INR 2,500 million each through Non-Convertible Debentures (NCDs) from the prestigious Asian Development Bank (ADB) in January 2024 and FMO, the Dutch entrepreneurial development bank, in December 2023.

The loan from DFC will enable UGRO Capital to strengthen its lending efforts, particularly for women-owned enterprises. Approximately 70% of the funding will be directed toward 2X qualifying businesses (women-owned or women-led). Additionally, at least $5 million will be allocated to support new-to-credit borrowers, with the backing of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Guarantee.

Shachindra Nath, Founder and Managing Director of UGRO Capital, expressed his gratitude for the support from DFC, stating, “We are honoured to receive this endorsement from DFC, an esteemed organisation committed to fostering financial inclusion globally. This transaction is a testament to UGRO Capital’s ability to forge meaningful partnerships with reputed global DFIs. Our shared vision of financial empowerment and inclusive growth drives us forward. With DFC’s support, we will be able to further our mission of addressing every need of every MSME, especially women-owned businesses and new-to-credit borrowers.”

Justin Andrews, Acting Vice President of Small Business & Financial Services at DFC, highlighted the importance of the partnership, saying, “Access to finance for new-to-credit borrowers and MSME finance is a key driver for financial inclusion. We are thrilled to be working with UGRO Capital to address the credit needs of small businesses aligned with our goal of supporting economic growth and financial access in underserved communities. This partnership will play a crucial role in advancing the growth of MSMEs and promoting gender equality through 2X qualifying businesses.”

This collaboration between UGRO Capital and DFC marks a milestone in empowering MSMEs, particularly women-led enterprises, and reinforces the company’s commitment to fostering financial inclusion and sustainable growth across India.

Disclaimer: This article provides an overview of UGRO Capital’s funding initiative in partnership with DFC and its impact on MSMEs in India. While every effort has been made to ensure the accuracy of the information, readers are advised to verify details through official sources and consult professionals before making financial decisions based on the content. The article is for informational purposes only.