Project detail - Ugro Capital Limited

Who is our customer?

UGRO Capital Limited is a publicly listed non-banking financial company (NBFC) headquartered in India and focused on addressing the credit needs of micro, small and medium enterprises (MSMEs). Founded in 2018, the company combines a data-driven underwriting approach with a diversified origination model that includes branch sourcing, partnerships, co-lending arrangements and embedded finance channels. UGRO provides secured and unsecured lending solutions across multiple sectors and geographies in India. As of March 2026, the company had an assets under management portfolio of approximately INR 153 billion (c. USD 1.6 billion) and serves a large and diversified MSME customer base. The company is led by Promoter and Managing Director Shachindra Nath and is backed by a diversified shareholder base comprising domestic and international institutional investors.

What is our funding objective?

FMO subscribed to INR 3.8 billion (USD 40 million equivalent) of senior secured, listed non-convertible debentures (NCDs) issued by UGRO Capital Limited. The financing will support UGRO's lending activities to underserved MSMEs across India, with earmarked allocation targets of at least 30% to women-owned or women-led SMEs, 30% to youth-owned or youth-led SMEs, 30% to rural SMEs, and 10% to eligible green projects in accordance with FMO's FI Master Green List. The transaction supports increased financial inclusion, job creation and sustainable economic development in India.

Why do we fund this investment?

FMO's investment provides long-term local currency funding that supports the growth of lending to underserved MSMEs in India, a segment that continues to face financing constraints despite its significant contribution to economic activity and employment. The transaction is expected to strengthen access to finance for women-owned, youth-owned and rural enterprises, supporting inclusive economic growth and job creation. 100% of FMO's investment is labelled as Reducing Inequalities as it supports activities that contribute to inclusive growth through increased access to finance for underserved MSMEs, contributing to SDG 10. 10% of FMO's investment is labelled as Green as it supports activities that contribute to climate mitigation through financing of eligible green assets in line with FMO's Green Finance methodology, contributing to SDG 13.

What is the Environmental and Social categorization rationale?

The project has been categorized as E&S Category B following FMO’s Sustainability Policy. In the case of NBFC investments, the environmental and social (E&S) risk classification is typically medium to low because the exposure is generally limited to retail and micro-entrepreneurs, and there is no exposure to activities on FMO’s exclusion list or that trigger any of the IFC Performance Standards (PSs). The company effectively manages E&S risks in the portfolio by implementing a basic E&S management system (ESMS), which includes an ESG scorecard and dedicated ESG personnel involved in the due diligence and monitoring processes.

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