DFIs & impact investors are critical funding partners to help bridge MSME credit gap in India: U GRO Capital Chair

Mumbai, Feb 7 (KNN) The Development Financial Institutions (DFIs) and impact investors are crucial funding partners to help bridge the MSME credit gap in India, said Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital.

He was addressing the first impact raised by focusing on debt investment of Rs 138 crore from funds managed/ advised by Switzerland based impact investor responsibility.

“With this transaction, we have been able to affirm impact investors’ confidence in our business model,” he added.

The transaction was structured in two legs - in the first leg, a Rs 31 core equivalent USD-denominated ECB was raised, said the press release.

The ECB transaction was done via an innovative social bond structure created as a result of joint efforts of the Swedish International Development Agency (SIDA), responsAbility and Danske bank to mobilize USD 177.5 million of debt capital from private investors.

These entities joined forces to contribute to the Sustainable Development Goals of the UN 2030 agenda and launched a social bond that bundles loans to innovate companies in capital scarce regions operating in in the financial inclusion, healthcare and WASH (water, sanitation, hygiene), agriculture and climate finance sectors, and that have a measurable, positive social impact.  

The ECB transaction was completed in record time of 3 months.

Rudrashis Roy, Investment Officer – Financial Institutions Debt, responsAbility said, “India continues to be an important market for funds managed or advised by responsAbility and we are excited to work with a like-minded partner like U GRO Capital to improve access to finance in the country."

"We were impressed with the way U GRO Capital has been able to offer credit products across the entire MSME spectrum through a multi-channel distribution strategy and how it is trying to solve problems related to data availability and quality in MSME underwriting through the use of technology and data analytics," he added.

The proceeds is aimed to serve as crucial funding to the Micro, Small and Medium Enterprises (MSME) segment in India. (KNN Bureau)