This CEO Quit His Corporate Job to Solve India's $650 Billion SME Credit Problem

The segment contributes roughly around 30 per cent to the country's GDP

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After spending more than two and half decades within the financial services sector and building various businesses under Religare’s portfolio, the very next step for Shachindra Nath was to start his own venture. The former Religare group CEO is very passionate about building a business which would solve India’s SME credit problem. However, unlike other CEOs, Nath didn’t choose the traditional route of starting up a startup, more particularly a fintech company.

Entrepreneur India

Instead, to embark on his entrepreneurial journey – he started scouting for a small yet clean listed NBFCs. After screening records of around five such NBFC, Nath acquired Chokhani Securities and rebranded it as Ugro Capital, wherein he bought INR 8500m as capital (raised to QIPs, PEs and HNI) and senior management on board.

Discussing his entrepreneurial experience with Entrepreneur India, Nath says while are we busy working for a corporate, we don't realise there are an infrastructure and ecosystem to support us. But once you start your company, however deep your market experience or network is, you are all alone.

He shares, “From making an excel sheet to base presentation to calling people to fix your meeting, you have to do everything. Secondly, when you see a credit in your bank account every month for more than 20 years and realise it is not going to happen for next few years, it is very unnerving.”

Additionally, financial services is a growth sector for a country like India and Nath considers himself fortunate to have an experience of a broader financial services market.

“In my previous career, I was instrumental in building two insurance companies, a large asset management company and NBFC. When I looked at the broader market to what should I do and where most of the institutional capital is coming – NBFC was stated choice,” he adds.

Serving the Right Class

The SME credit gap is real in India. The segment contributes roughly around 30 per cent to the country’s GDP and yet, the capital gap within the sector is USD 650b.

Nath, who aspires to build an enterprise out of Ugro Capital to solve India’s credit-related need for SME, believes that the reason why there is a gap in the sector because the lending organisation do not understand the underline borrower and their nature of operations very well.

“Historically, SME's have been an unorganised sector. Banks traditionally lend against reported cash flow, balance sheet, etc. The unformatted organisation structure is a challenge for a bank, an NBFC and for us,” he says while adding that, “If you just look at reported numbers, you wouldn't be able to lend to these SMEs. However, if there is a way to assess its income, growth potential, nature and behaviour of the business. Then, we would be able to lend.”

In others words, the entrepreneur suggests that it is all about how lenders find the real cash flow for a small borrower and how will they be able to service it and return back the money.

“You have to design your organisation according to your customer or to the borrower and then, build the ability to underwrite loan according to him,” he pointed out.


In a today’s age, where every third fintech company is keen to cater to the MSMEs, Nath is not interested in developing a dotcom company and selling it in a few years.

Sharing his vision for Ugro, he says, “We would be as technology-driven as any other fintech startup but we wanted to build a business for perpetuity that's why acquiring a listed company made a lot of sense.”

Additionally, technology can only solve the data-driven problems. The problem with SMEs is that there is hardly any organised data. However, with GST and other few other initiatives, this is bound to change. “So, just by using technology - you cannot build a scalable platform. You have to use a combination of technology and human judgement around it. This is even our approach,” he noted.

Ugro is now looking to build its very own technology platform, which can integrate with every fintech in the same space.

“One of the advantages we would have over others NBFCs is that we are starting now - in the same generation as fintech startups and hence, we would be able to integrate better with them. Considering we are a startup, we will be nimble enough to partner with them,” he concluded.