The only thing unique/special/moat in this business can be the credit scoring model and their risk management. Jury is still out on that and we will only know the verdict in few years, specially after a down turn. The one thing going for Ugro is the massive and ever increasing TAM as MSME’s are (gradually) realizing that there is benefit in formalization rather than staying informal and saving taxes. As OCEN, ONDC etc matures there will be many more MSME’s will opt for formalization and look for credit. My belief is that lending firms which can keep the Risk in control, will reap huge benefits is the MSME lending space. An investor can wait for the definitive verdict to be out in few years or can invest now with a close eye on whether the Management is walking the talk and get out if they are not.
Disc: Invested
| Subscribe To Our Free Newsletter |
