SBI and U GRO Capital enter into co-lending partnership

By Leandra Monteiro

U GRO Capital, a listed MSME lending FinTech platform, announced that it has entered into a co-lending partnership with State Bank of India (SBI), India’s largest bank, to provide credit to the micro, small and medium enterprises (MSME). Through this collaboration, SBI and U GRO aim to disburse upto ₹ 5 billion 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.

The arrangement will extend credit products under U GRO’s Sanjeevani program, offering loans upto ₹ 300 million, 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 ₹ 7.5 billion, 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.

With this partnership, U GRO has established its distinguished position in the fast-evolving co-lending ecosystem where it is the first NBFC which have been accepted as Co-Lending partner with Bank of Baroda, IDBI Bank and now SBI.

Speaking on this occasion, Shri 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. Today marks a significant day in U GRO Capital’s business journey, and we are elated to sign a co-lending agreement with the country’s largest lender, State Bank of India.

This partnership reiterates SBI’s faith and value, in our ability to leverage sectoral expertise and technology capabilities to address the critical MSME credit needs.

The GRO–xStream platform is a reflection of our belief that collaboration, as opposed to competition, is the way forward to solve the unsolved credit gap of MSMEs. We look forward to nurturing this significant relationship, to jointly support more MSMEs in their revival and growth.”

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 envisions to achieve 1% market share of outstanding MSME credit in India and serve 1 million customers.