SBI and U GRO aim to co-lend $500 loans up to Rs 500 crore to MSMEs by March 2022

The share of MSMEs in India’s total gross bank credit stood at 12.04% in September 2021, down slightly from 12.15% in August 2021, according to RBI data. (Image: Pixabay)

Credit and finance for MSMEs: The digital lender U GRO Capital announced on Wednesday a partnership with the State Bank of India (SBI) to disburse up to Rs 500 crores by March 2022 via the co-loan. The Reserve Bank of India (RBI) issued guidelines in November last year under the co-origin model for non-bank financial corporations (NBFCs) and banks to jointly lend in order to improve the access to credit to underserved segments. According to RBI, banks are taking their share of back-to-back individual 0 loans on their books in a co-lending model. However, NBFCs are required to keep at least a 20 percent share of individual loans on their books.

The merger will leverage SBI’s prowess on the liability side and U GRO Capital’s distinctive creation capabilities and underwriting engine on the asset side, U GRO said in a statement. The credit will be extended under U GRO’s Sanjeevani program up to Rs 3 crore. The Sanjeevani program was launched in June last year and has disbursed over Rs 750 crore as of October 31, 2021. U GRO would integrate with the bank on its GRO-xStream platform. The company has integrated more than 15 fintech / NBFC partners on the asset side and banks on the liability side. It already has a co-loan agreement with Bank of Baroda and IDBI Bank.

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“This collaboration will further enhance our distribution network, as we aim to expand our credit reach to more MSMEs,†Dinesh Khara, chairman of the State Bank of India said in a statement. Shachindra Nath, Executive Chairman and Managing Director of U GRO Capital, said: “We believe that the next decade will be all about the collaboration between big banks and niche NBFC / fintechs in which lending as a service would become. the dominant force. U GRO has 55 branches in 9 states and aims to expand the branch network to 100 by FY22. The company said it aims to achieve a 1% market share of outstanding loans for MSMEs in India by 2025.

The share of MSMEs in India’s total gross bank credit stood at 12.04% in September 2021, down slightly from 12.15% in August 2021, according to RBI data. The total rollout of bank credit in September to MSMEs was Rs 13.20 lakh crore while the overall gross bank credit stood at Rs 109.56 lakh crore.