U Gro Capital ties up with SBM to launch credit cards, targets to sell 15,000 cards

Eligible customers identified by U Gro will have to open a fxed deposit with SBM and the credit limit is fixed at 90 per cent of the FD amount, as per an official statement. The BSE-listed company's executive chairman and managing director Shachindra Nath said it will be doing the distribution and customer due diligence of the customers, while the Mauritian government-owned lender will be taking the credit risk.

He said the 'Gro Smart Business card' will cater to the working capital needs of the micro, small and medium enterprises, adding that NBFCs are mandated to do only term loans and not working capital finance.

''Over the next few years, I think we should be able to sell up to 10-15,000 cards,” he said, adding that the ultimate aim of the company is to hold 1 per cent of the lending to MSMEs, which will entail it having about 15 lakh borrowers.

The credit card will be given to U Gro's customers, and will come at a nominal fee eventually, officials said.

Neeraj Sinha, the head of consumer and retail banking at SBM said the partnership has been in the works for over a year now and offers a win-win solution for all the stakeholders. Nath said the company is adding 75 new branches to the existing 34 branches. Without giving an exact timeline on the same.