U GRO Capital is a small business lending fintech platform. It had recently announced its expansion in the Tier 2 and 3 regions across five states – Karnataka, Tamil Nadu, Gujarat, Telangana and Rajasthan, where it will provide its loan services to micro businesses. Examples of borrowers would include businesses such as Kirana stores, Pharmacies, Mess/ Restaurants, Hair salons, etc. These small businesses face a lack of formal capital infusion due to insufficient database, lack of requisite documents and unavailability of bureau score owing to not having availed any prior financing. However, U GRO Capital is leveraging its sectoral knowledge and technological capabilities, to solve the credit gap of these businesses.
Below are a few considerations for these businesses to access credit, conveniently from the company:
- Understanding the information pertaining to the loans
- Amount that can be lent: The Company will provide secured loans ranging from 1 Lakh to 10 lakh, under its Shakti program. For the unsecured loans, amount ranges from 50,000 to 5 lakh.
- Loan duration: Tenure ranges from 12 to 36 months for unsecured loans, whereas for secured loans, the duration ranges from 1 to 9 years
- Timeline for disbursal: U GRO Capital offers loan disbursals in a quick and convenient manner. The disbursal period for unsecured loans is between 3 to 4 days, while for secured loans the disbursal timeline is 7 to 8 days.
- Documentation required
U GRO Capital utilizes its sector expertise to understand businesses’ current and future cash flows. This allows it to reduce dependency on heavy documentation. In the case of micro businesses, it utilizes conventional data like GST, ITR, Bank Statements/ Pass-book images. It also uses alternate data like trade bills (Pucca/ Kaccha), electricity bills, etc. to understand the borrower’s repayment capabilities.
- Process to avail the loan: GRO Micro
- Small business owner can apply for a Business Loan – assisted by a GRO Micro Sales Executive on its proprietary GRO+ App
- Provides the necessary documentation
- Receives in-principle approval post credit-appraisal within a day of loan application
- Loan Agreement is signed, and loan is disbursed in the customer’s bank account