UGRO Capital Ltd, an MSME-focused DataTech lending platform, has raised ₹380 crore through the issuance of 38,000 senior, secured, rated, listed, redeemable and transferable non-convertible debentures (NCDs) to FMO, the Dutch entrepreneurial development bank.
This is FMO’s third investment in UGRO Capital in less than three years. It follows NCD investments of ₹250 crore in December 2023 and ₹260 crore in February 2025.
Five-year instrument supports MSME lending
The new instrument has a five-year tenor, matching the longer-duration secured lending that UGRO provides to small businesses in Tier-3 towns and beyond.
In line with FMO’s mandate, the proceeds will be used to finance women-owned and women-led SMEs, youth-owned and youth-led SMEs, and rural SMEs.
Funds to support green projects
The proceeds will also contribute towards the financing or refinancing of eligible green projects aligned with FMO’s sustainability approach.
With this fundraise, UGRO Capital has raised more than ₹1,300 crore in debt from development finance institutions and impact-focused investors in India and overseas.
Development institutions back platform
Investors in UGRO’s debt include FMO, IFU, the Danish sovereign development fund, the Asian Development Bank, Triple Jump, BlueOrchard, responsAbility, Calvert Impact Capital, Enabling Qapital, GMO, WaterEquity and MicroVest, among others.
“FMO investing in UGRO for the third time in three years says something about the way development capital now views MSME lending in India,” UGRO Capital, Founder, Vice Chairman and Managing Director, Shachindra Nath, said.
Focus on underserved businesses
“Our objective is to be the platform of choice for global development capital seeking measurable, credit-disciplined MSME impact in India, and FMO’s continued partnership brings us closer to that goal,” he said.
“We are pleased to deepen our partnership with UGRO Capital through this financing, which will support greater access to credit for underserved MSMEs across India,” FMO, Co-Chief Investment Officer, Juan Jose Dada Ortiz, said.
Data-led lending supports inclusion
“Small and medium-sized businesses are key drivers of entrepreneurship, job creation and economic development, yet many continue to face barriers in accessing the financing they need to grow,” he said.
“UGRO’s data-driven approach and strong distribution network enable it to reach businesses that are often underserved by the formal financial sector, supporting more inclusive economic growth and contributing to FMO’s goal of reducing inequalities,” Ortiz said.