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.