Dugar Finance: Impact-led Secured MSME Lender Raises $18 Million

Dugar Finance, a prominent impact-driven secured MSME lender, has successfully raised $18 million (approximately Rs 160 crore) in a recent debt funding round. This round was spearheaded by the Swiss investor Symbiotics, with notable participation from several major Indian banks, including Union Bank of India, Karur Vysya Bank, Indian Overseas Bank, Tamilnad Mercantile Bank, and STCI Finance among others. In this funding round, Symbiotics made a significant contribution of $5.5 million.

Earlier in June this year, Dugar Finance had secured $3 million in debt from the $75-million Green Basket Bond issued by Symbiotics Investments. The newly acquired funds are slated to enhance Dugar Finance’s secured MSME lending operations and facilitate its expansion into Tier-2 to Tier-6 markets throughout India, as stated in their press release.

About Dugar Finance

Under the leadership of Ramesh Dugar, Dugar Finance operates as an impact-focused, non-deposit-taking NBFC across various regions in India. The company boasts a robust presence in tier 3 and tier 4 markets. Dugar Finance specializes in providing secured MSME and commercial vehicle financing, aimed at fostering income generation, micro-entrepreneurship, and supporting small businesses, along with first-time commercial vehicle drivers who often lack access to formal credit.

Focus on Risk Management and Governance

Dugar Finance places a strong emphasis on disciplined underwriting practices, robust governance frameworks, and prudent risk management strategies. The company is dedicated to nurturing its relationships with institutional lenders while focusing on developing a resilient and scalable lending platform, specifically designed to bolster long-term economic activities within India’s growth corridors.

Current Operations and Future Goals

Based in Chennai, Dugar Finance is operational in six states, catering primarily to semi-urban and rural customer segments. Its diversified portfolio includes income-generating secured MSME loans along with commercial vehicle loans, which are instrumental for micro-entrepreneurs, small enterprises, and first-time commercial vehicle operators. The company aims to expand its operations to more than 75 branches and achieve an AUM of Rs 600 crore by FY27, progressing towards a target of Rs 2,000 crore AUM by FY29, while ensuring strong financial stability, with a Return on Assets (RoA) above 4% and Gross Non-Performing Assets (NPAs) below 2%.