UGRO Capital raises Rs 380 crore from FMO to scale MSME and merchant lending

The lender has issued 38,000 NCDs subscribed by Dutch development bank FMO. Proceeds will support credit for women-, youth- and rural-led SMEs, green projects and GROx merchant-finance borrowers including kiranas, agri-input dealers and pharma distributors.

— Source publishedWed, 16 Sept, 2026, 15:29 IST·First seen Wed, 16 Sept, 2026, 15:41 IST·Source YourStory

What happened

UGRO Capital raised Rs 380 crore in FMO-subscribed NCDs to expand lending to women-, youth- and rural-led SMEs and green projects. Its GROx merchant-finance

Key facts

  • Rs 380 crore
  • 38,000 NCDs
  • Rs 250 crore (December 2023)
  • Rs 260 crore (February 2025)
  • over Rs 1,300 crore
  • annual turnover below Rs 3 crore
  • average loan ticket of approximately Rs 18 lakh
  • average GROx working capital of around Rs 1 lakh
  • about four-fifths of Emerging Market portfolio in Tier III and beyond

Why this matters

The new debt capacity strengthens UGRO as a potential financing partner for retail ecosystems seeking to embed merchant credit across small-format trade networks.

What to watch

  • Quarterly loan-book growth, GROx disbursal volume and share of merchant-finance originations.
  • GNPA, net credit cost, collection efficiency and restructuring trends in MSME and merchant cohorts.
  • Average loan yield, borrowing cost and net interest margin after the FMO NCD issuance.
  • Geographic mix of new borrowers, especially rural and tier-2/3 markets.
  • Repeat borrowing, digital-payment adoption and inventory-turnover improvement among financed merchants.
  • Further co-lending, securitization or development-finance commitments.
  • Prioritize GROx disbursals to high-turnover kirana, pharma and agri-input merchant clusters.
  • Use FMO-linked impact categories to expand women-, youth-, rural- and green-lending products.
  • Partner with distributors, B2B commerce platforms and payment providers to source borrowers using transaction-led underwriting.
  • Build collections and early-warning capacity in new geographies before materially increasing loan-ticket sizes.
  • Seek additional blended-finance or co-lending lines if deployment and asset quality remain on target.