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New Investment to Support Green Finance

In Business
June 21, 2023

IFU has invested DKK 200 million in UGRO Capital, which is a lending platform for small businesses in India. The investment will assist UGRO Capital in growing their business and increase focus on providing lending that supports the green transition. The investment is made on behalf of the Danish SDG Investment Fund, which is backed by large Danish pension funds and private investors.

Micro, Small and Medium Businesses (MSME) are one of the strongest drivers of economic development, innovation and employment. Access to finance is frequently identified as a critical barrier to growth for MSMEs. UGRO capital is an Indian lending platform for small businesses that need funding to develop their businesses creating economic growth and new job opportunities for people. The company has close to 46,000 customers, a total loan portfolio of DKK 5.1 billion, more than 1,700 employees and 98 branches.

“UGRO Capital was envisaged to be built as India’s largest small business financing platform, combining the power of Data & Tech, and was uniquely created as India’s first listed startup in 2018. This is our second equity capital raise since inception, and we intend to gain 1% market share with 1 million small businesses. It has been our endeavour to change the life of small businesses, and having a global development financial institution like IFU as a partner is helping us achieve our mission at an accelerated pace,” said Shachindra Nath, Vice Chairman and Managing Director, UGRO Capital.

“We are very pleased to become investor in UGRO Capital, which we believe is a well driven and technologically advanced financial institution having a solid impact by providing business loans to smaller businesses in India,” said Deepa Hingorani, Senior Vice President in IFU.

Focus on climate financing
IFU is investing DKK 200 million in share capital assisting UGRO Capital in growing their business and increasing impacts that so far have supported more than 300,000 jobs. As part of the investment, it has been agreed to develop and implement a climate finance strategy framework as well as climate-related loan products that will support the green transition.

“One of IFU’s main strategic goals is to assist countries and companies in building green and inclusive societies that will reduce greenhouse gas emissions and improve resilience towards climate change. By developing a climate finance strategy as part of our investment in UGRO Capital, we are introducing a new set of instruments that will improve the opportunities for smaller businesses in greening their operations and supporting the green transition in India,” said Rohit Goyal, Investment Director in IFU.

Invested in more than 100 companies in India
The investment is also in line with the green strategic partnership between India and Denmark that was signed by Prime Minister Modi and Prime Minister Mette Frederiksen two years ago. On that backdrop, IFU has received additional funds to invest in climate-related and green projects in India.

“IFU has invested in more than 100 companies in India, and we have a prioritised sector approach towards renewable energy and green infrastructure, financial services, healthcare as well as sustainable food with current investments representing all sectors in India. India is expected to continue being a significant investment destination for IFU in the coming years,” said Deepa Hingorani.

The investment is made on behalf of the Danish SDG Investment Fund, which is a DKK 5 billion public-private partnership backed by large Danish pension funds and private investors.