They do secure lending to SMEs at ~14%. Which is actually aligned with market range. My family being once part of the informal lending system can say that these kind of yields are actually inline.
Even today, good businesses do not mind taking credit at 12-15% range in cash (& goes unaccounted from formal P&L reporting). Now for credit taken from likes of Ugro, the interest expenses becomes part of formal P&L and hence net-net beneficial for the debtor (vis-a-vis informal loan).
Usually in any sector, whenever informal and formal competes, formal business suffers because of compliance, tax costs etc. Herein, UGRO is competing head-on with informal lenders & this makes it a unique proposition for them (they just need to keep their asset quality, credit cost in control).
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