Micro, Small, and Medium Enterprises (MSMEs) contribute significantly to India’s GDP and employment. Despite their critical role, they face severe credit shortages. Shachindra Nath, Chairman of UGRO Capital, sought to bridge this gap with a mission-driven, technology-first approach to MSME financing. Nath shared his journey and vision for empowering India’s MSMEs through data-led lending in an episode of Simple Hai! with veteran finance journalist Vivek Law.
A Journey from Capitalism to Purpose
With over three decades of experience in the financial services industry, Nath stepped away from corporate boardrooms to build something meaningful. Influenced deeply by his roots in Banaras and his late father’s values, he transitioned from a profit-driven career to a purpose-led mission. His decision was further cemented when he was unfairly ousted from his previous company for refusing to compromise on ethics.
Early Lessons from the Carpet Industry
Nath’s initial work in Mirzapur’s carpet industry exposed him to the harsh realities of MSMEs. With a working capital cycle of 12 months and no access to formal finance, weavers struggled to survive. This experience sowed the seeds for UGRO Capital – a company committed to solving India’s MSME credit crisis.
UGRO Capital: Bridging Credit Gaps Through Technology
UGRO Capital’s unique proposition lies in its use of data, technology, and analytics to assess the creditworthiness of MSMEs. Nath believed that traditional methods failed because lenders couldn’t understand the informal cash flows of small businesses. By analyzing structured data from GST returns, bank statements, and business credit bureaus, UGRO created a “CT scan machine” for credit evaluation—sidestepping the need for income tax returns or balance sheets.
“Kaccha Chhodo, Pakka Pakdo”: A Call to Formalization
UGRO’s campaign urges MSMEs to move from informal to formal financial practices. While paying taxes might reduce short-term profits, formal businesses gain access to substantial credit, enabling them to scale significantly. A business moving from ₹1 crore to ₹3 crore turnover can potentially triple its profits and employment capacity.
The Digital Catalyst: How GST, UPI, and Data Are Changing Lending
The trifecta of GST implementation, digitized bank statements, and the account aggregator framework has made small business data more accessible and transparent. UGRO Capital harnessed these developments to make MSME lending fast, reliable, and scalable. Their AI-driven platform can now deliver credit decisions quickly and efficiently, revolutionizing the once-cumbersome lending process.
Credit That Scales: UGRO’s Growth and National Impact
In just three years, UGRO Capital built a loan book of ₹10,000 crore and served over 1.3 lakh MSMEs. They aim to onboard one million customers over the next 2-2.5 years. This is not just about lending—each loan fuels employment, potentially preventing rural-to-urban migration and fostering local economic growth.
A Golden Era for MSMEs
Nath believes that India is entering a “golden era” for MSMEs, thanks to generational shifts, digitization, and formalization. With younger business owners embracing tech and compliance, he predicts MSME lending will soon outpace consumer and personal loans in scale and impact.
Championing Women Entrepreneurs
UGRO Capital is actively supporting women entrepreneurs, especially in Tier II and Tier III cities. From interest rate benefits to ensuring women are co-signers on business loans, UGRO is committed to elevating their role in entrepreneurship. The company also taps into Development Finance Institutions (DFIs) like the Asian Development Bank and DFC to fund its women-focused initiatives.
Lessons in Entrepreneurship
Nath advises aspiring entrepreneurs to first gain 8-10 years of work experience, save diligently, and enter business with full commitment. Half-hearted attempts or viewing entrepreneurship as a fallback option won’t lead to meaningful outcomes. He also emphasizes respecting investor money and building sustainable, impactful enterprises rather than chasing quick exits.
Balancing Life and Legacy
Despite his responsibilities, Nath ensures weekends are family-focused. He finds joy in everyday challenges and sees his role as a “sutradhar” or facilitator. He takes pride in building not just a company but a culture and institution that others can take forward.
He also finds solace in simple pleasures—watching movies in theaters, admiring the works of Govinda and Kishore Kumar, and spending quality time with his children. For him, true wealth lies in creating something that uplifts others, not in personal material gains.
Building a New Lending Paradigm
Shachindra Nath’s story isn’t just about a finance company—it’s about rethinking wealth, entrepreneurship, and impact. UGRO Capital is pioneering a new era of MSME lending where data meets empathy, and purpose meets performance. With their continued innovation, they’re not just solving a ₹90 lakh crore credit gap—they’re rewriting the rules of inclusive finance in India.
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