Let me begin by expressing my deepest gratitude towards you ourshareholders for your continued confidence support and faith in our company especiallyin such testing times.
We began our journey only a couple years ago with a simple mission of'Solving the Unsolved' - the USD 300 Billion Small Business Credit Need in India. Withthis ideology we raised
around INR 920 Crores of capital from a diversified set of marqueeinvestors. It gives me great pride and honour to inform you that together we have builtsomething that has been previously unheard of: A large scale enterprise in a short timeframe that not only survived but strived in what was one of the most challenging yearsthe financial world has seen since the global financial crisis of 2008.
The Micro Small and Medium Enterprises (MSME) sector contributessignificantly to the economic and social development of our country by fosteringentrepreneurial spirit and self-employment. The nation's magnificent vision of becoming afive Trillion-dollar economy by 2024-25 largely rests on the shoulders of MSME growth. TheSME sector's contribution to India's GDP stands at around 30% whereas in more developedeconomies the share typically hovers around 45%. But even though MSMEs account for 45% ofIndian Industrial output only 16% of MSMEs actually have access to formal credit. Fromthe available funding to MSMEs 70% of the market is funded by informal sources likefamily friends and money lenders and only 30% is funded by formal sources like debt.
At U CRO Capital we see this credit gap as a tremendous opportunity astraditional banks don't prefer to lend to this segment due to their one-size-fits- allapproach.
As SMEs are regarded as the key drivers of the Indian growth story wefirmly believe that the scenario has to change. And the key to cater to the SMEseffectively is to develop an indepth understanding of various business models. Hence weadopted a sector- focused lending strategy for the SMEs and after extensive studies ofmacro
and micro parameters we narrowed down to 8 sectors which constitute to50% of the SME credit demand. We got a deep understanding of the ecosystem we lend tofuture prospects lending opportunities understanding the business &- the cashflow ofthe companies in order to design financial products which suits the credit needs. We thenintegrated that knowledge with technology and through statistical analytical scorecards wecreated a perfect blend of fin-tech and fin-touch.
We created our technology platform which can underwrite an applicationand give an in-principle approval in under 60 minutes. However we made sure that we alsokeep the traditional checks and balances in place to ensure the quality of our loan bookis maintained. We aim to blend the robustness of traditional financial institutions withthe data-driven approach of modern fintech companies to provide a unique solution to thefunding needs of small businesses. We are building a new generation lending platform whichwould leverage digital capabilities across the value chain - customer acquisition creditunderwriting and post-disbursal monitoring.
As we pass through these unprecedented times I have no doubt thatmankind will survive this tough period in history and come out even stronger and Indiatoo will be back on its growth path very soon. Given our addressable credit market sizeour strong foundation and with the support of our stakeholders and hardworking employees.I'm confident that U CRO Capital will continue to strive in the coming years and in factwe see these challenging times as an opportunity to gain market share due to ourrelatively recent beginning and clean slate.