Women entrepreneurship: SME lender U GRO launches new scheme for small businesses

Small business lending platform U GRO has launched an unsecured SME lending product called Narayani for women entrepreneurs.


Sachin Bansal backed small business lending platform U GRO has launched an unsecured SME lending product called Narayani for women entrepreneurs. Through this, the company would offer a 0.50 per cent lesser Risk Assets Acceptance Criteria (RAAC) rate “compared to the rates offered by other SME lending products available for women entrepreneurs,” the company said.

Women-owned SMEs would not have to provide collateral guarantee even as there would be zero processing fee and no pre-closure charges for them if the loan tenure extends over 18 months. “We have designed our Women’s Only SME Business Loan product which addresses the collateral and guarantor-related issues that women entrepreneurs usually face while approaching investors or lenders for funding,” said Abhijit Ghosh, Whole Time Director and CEO, U GRO Capital.

Out of 64 million ‘unique live borrowers’ in FY19, women borrowers had around 85 per cent share in India’s microfinance market, according to a report by SIDBI and PwC. “Women-driven entrepreneurial enterprises will not only ensure regular repayments for microfinance lenders but will also establish a strong influencer channel in the form of women entrepreneurs for higher credit penetration,” the report said.

However, without much collateral and financial feasibility of the business pushes women away from financial services. Importantly, India was ranked 52nd out of 57 most female entrepreneurs friendly countries in the MasterCard Index of Women Entrepreneurs in 2019 report while according to the National Sample Survey, around 14 per cent of the business firms are run by women in India.

Narayani offer focuses on 23-65 years age women entrepreneurs to offer loans from Rs 10 lakh to Rs 50 lakh with a tenure ranging between 1 – 4 years. The company said unlike other secured SME lending products for women entrepreneurs, Narayani offers lower initial barriers to women entrepreneurs that don’t have the guarantors’ backing.

U GRO is targeting women entrepreneurs in eight SME sectors and 38 SME sub-sectors in India including healthcare, education, chemicals, hospitality, auto component, restaurant, pathology lab, etc. Under the Narayani scheme, the company is in the process of disbursing loans with an average ticket size of Rs 20 lakh.