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SBI, U GRO Capital enter into co-lending partnership; to offer MSME loans upto Rs 500 cr by March 2022

11:18 AM Nov 17, 2021 | FPJ Web Desk

U GRO Capital, a listed MSME lending fintech platform, today announced that it has entered into a co-lending partnership with State Bank of India (SBI), to provide credit to the micro, small and medium enterprises (MSME). Through this collaboration, SBI and U GRO aim to disburse upto Rs 500 crores by March 2022.

The agreement has been signed in accordance with the alternative option of Reserve Bank of India’s revised co-lending guidelines, which involves post disbursal takeover of bank’s share in the loan on a back-to-back basis. This arrangement will leverage SBI’s prowess on the liability side and U GRO Capital’s origination and distinctive underwriting engine capabilities on the assets side, SBI said in a press release.

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What is it for?

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The arrangement will extend credit products under U GRO’s Sanjeevani program, offering loans upto Rs 3 crore, at competitive rate of interest. U GRO Capital had launched ‘Sanjeevani’ as a solution to provide credit to pandemic impacted MSME sector as an end-to-end digital lending program in June 2020 and has disbursed over Rs 750 crores, as of October 31, 2021.

The partnership has been hosted on U GRO Capital’s 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. U GRO has on-boarded more than 15 FinTech / NBFC partners on asset side and Banks on liability side, via this GRO–xStream.

First NBFC to be accepted as Co-Lending partner

With this partnership, U GRO is the first NBFC which has been accepted as a Co-Lending partner with Bank of Baroda, IDBI Bank and now SBI.

Dinesh Khara, Chairman, State Bank of India said, “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.”

Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital said, “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.”

U GRO Capital, currently has 55 branches across 9 states. It aims to expand the branch network to 100 by FY2022. By 2025, U GRO aims to achieve one percent market share of outstanding MSME credit in India and serve one million customers.

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