ResponsAbility Investments, a Swiss firm in the process of being acquired by UK-based M&G, recently facilitated INR 1.4 billion (USD 18 million) in borrowing by U Gro Capital, an Indian financial technology (fintech) platform, to increase its funding of micro-, small and medium-sized enterprises (MSMEs). The debt package comprises INR 1.1 billion (USD 14 million) in nonconvertible debentures (NCDs) with the remainder in the form of an external commercial borrowing transaction. The latter is funded by private investors as part of a USD 178 million social bond structure established by Denmark’s Danske Bank, responsAbility and the Swedish International Development Agency.
Rudrashis Roy, an investment officer at responsAbility, said, “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.”
During the quarter ended December 2021, U Gro Capital grew its customer base to 16,500 and disbursed INR 11 billion (USD 142 million) in loans, closing the period with INR 25.9 billion (USD 344 million) in assets under management.
Founded in 2003 and headquartered in Zurich, responsAbility is an impact investing organization that focuses on making investments that have positive social and environmental outcomes. It has private debt and private equity investments deployed in 80 countries. As of 2021, the firm has eight offices and total assets of USD 3.7 billion.
By Sheen Gupta, Research Associate
Sources and Additional Resources
U Gro Capital press release hosted by FinDev Gateway
https://www.findevgateway.org/sites/default/files/news/submissions/92906/Press%20release_U%20GRO%20Capital%20raises%20its%20first%20foreign%20debt%20investment%20of%20INR%20138%20Cr%20from%20responsAbility.pdf
U Gro Capital homepage
https://www.ugrocapital.com/
U Gro Capital financial results
https://www.ugrocapital.com/investor-relations
U Gro Capital 2021 earnings press release
https://www.ugrocapital.com/sites/default/files/2022-02/Earnings%20Press%20Release-3QFY22.pdf
Danske Bank Social Bond Transaction press release
https://danskeci.com/ci/news-and-insights/archive/2021/dansk-bank-in-unique-social-bond-transaction
Danske Bank homepage
https://danskebank.com/
ResponsAbility homepage
https://www.responsability.com/
M&G homepage
https://www.mandg.com/
Swedish International Development Agency homepage
https://www.sida.se/
Previous MicroCapital article on responsAbility
https://www.microcapital.org/microcapital-brief-mg-acquires-majority-stake-in-impact-investment-firm-responsability/
Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.
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