UGRO Capital Ltd, an MSME-focused data-tech lending platform, on Thursday said it has raised nearly ($40 million) Rs 380 crore from Dutch development bank FMO.
The funding was raised through the issuance of 38,000 senior, secured, rated, listed, redeemable and transferable non-convertible debentures (NCDs), which were fully subscribed by FMO. The instrument has a five-year tenor.
This marks FMO’s third investment in UGRO Capital in less than three years. The Dutch lender had previously invested Rs 250 crore through NCDs in December 2023 and another Rs 260 crore in February 2025.
UGRO Capital will use the proceeds to finance women-owned and women-led small and medium enterprises (SMEs), youth-owned and youth-led SMEs, and rural SMEs. Part of the funds will also be used to finance or refinance eligible green projects in line with FMO’s sustainability framework, it said in a press statement.
“The businesses we finance, a tailor in a Tier-3 town assessed on her bank statements rather than a tax return, or a kirana owner taking his first formal working-capital line through GROx, are the same businesses that generate the strongest returns for our shareholders. There is no trade-off between the two. Every rupee that development finance institutions place with UGRO goes into that segment, is tracked against defined SDG outcomes and is independently verified,” said Shachindra Nath, founder and managing director, UGRO Capital.
The latest transaction takes UGRO Capital’s total debt raised from development finance institutions and impact-focused investors in India and overseas to more than Rs 1,300 crore. Its lending partners include FMO, Denmark’s sovereign development fund IFU, the Asian Development Bank (ADB), Triple Jump, BlueOrchard, responsAbility, Calvert Impact Capital, Enabling Qapital, GMO, WaterEquity and MicroVest, among others.
