MSME lender U Gro Capital’s Sachindra Nath pitches for new NBFC category
RBI) to increase the risk weight on consumer loans will have an impact on NBFCs with the bank borrowing cost increasing. However, it does not impact the NBFCs serving the MFI and housing finance segments. The RBI move is going to increase our borrowing cost from banks," he added without revealing further details.
The publicly-listed MSME lender on Tuesday partnered with Laghu Udyog Bharati, an organization dedicated to supporting micro-enterprises, to launch awareness programmes to empower MSMEs with knowledge about government schemes and digital credit. “A research report shows that when it comes to credit, 28% MSMEs are self-financed; 12% have raised financing through informal channels; while only 10% are financed through formal institutions such as banks and NBFCs. NBFCs share in MSME lending is just 10%," Om Prakash Gupta, All India general secretary, Laghu Udyog Bharati, said during a press conference.
“We will organize awareness programmes for MSMEs with U Gro in 100-150 locations across India in next few years. We believe the awareness around credit will be a game-changer for small businesses in India." Large NBFCs’ MSME lending exposure is not more than 12-15%, Nath claimed. “We have so far built a loan book of ₹8,000 crore and served about 90,000 MSMEs.
Over the next three years, our aim is to capture 1% market share of the MSME credit that currently stands at about ₹22 lakh crore. This means we will build a book of ₹25000 crore and target a base of over 10 lakh MSMEs." U Gro Capital, which works with seven public sector banks and four private sector banks, operates on a co-lending model where the NBFC finances 20% of the loan amount, while 80% is financed by traditional banks. Earlier this year, the Delhi-based
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