Strengthening Financial Access Beyond Metro Cities

India’s growth story is increasingly being driven by its tier 2 to tier 6 cities, where small businesses form the backbone of local economies. Recognizing this opportunity, Dugar Finance, a Chennai-based non-banking financial company (NBFC), is doubling down on its mission to serve underserved markets. With fresh funding of ₹45 crore, the company is set to scale its secured MSME lending operations and deepen its presence across semi-urban and rural India.

Fresh Capital to Power Expansion

The company recently raised $5 million (₹45 crore) in a pre-Series A funding round led by HegdInvst, a Category II Alternative Investment Fund focused on growth equity. This follows its earlier fundraising efforts, including structured debt from global and domestic institutions such as British International Investment and Symbiotics.

This consistent flow of capital reflects strong investor confidence in Dugar Finance’s long-term vision and its ability to execute in a challenging yet high-potential segment.

A Legacy of Trust and Performance

Founded in 1987 by Ramesh Dugar, the company has built a solid reputation over decades. It currently manages assets under management (AUM) of around ₹400 crore and has achieved an impressive five-year compound annual growth rate (CAGR) of approximately 55%.

What sets Dugar Finance apart is its disciplined approach to risk management. With gross non-performing assets (NPAs) maintained below 1.5% and a return on assets (RoA) of about 5%, the company demonstrates a strong balance between growth and financial stability.

Expanding into Secured MSME Lending

While the company has traditionally been known for its vehicle financing business, it is now strategically expanding into secured MSME lending. This move aims to diversify its portfolio and create a more balanced loan book.

MSMEs in smaller towns often face significant challenges in accessing formal credit. By offering secured lending solutions, Dugar Finance is addressing this gap and enabling businesses to access the capital they need to grow and thrive.

Technology and Talent as Growth Drivers

The newly raised funds will be deployed to strengthen the company’s technology infrastructure and enhance analytics-driven underwriting systems. By leveraging data and centralized risk management, Dugar Finance aims to improve efficiency and decision-making across its operations.

Additionally, the company plans to invest in senior talent acquisition, ensuring that it builds a strong leadership team capable of driving its next phase of growth.

Building a Scalable and Responsible NBFC

With support from HegdInvst, Dugar Finance is also focusing on improving governance standards and gaining access to international capital markets. This collaborative approach will help the company evolve into a professionally managed and scalable NBFC.

As India’s financial ecosystem continues to expand, institutions like Dugar Finance play a crucial role in bridging the credit gap in underserved regions. By combining experience, innovation, and strategic vision, the company is well-positioned to contribute to inclusive economic growth.

The Road Ahead

Dugar Finance’s journey reflects the broader transformation of India’s lending landscape. With a strong foundation and a clear roadmap, the company is poised to unlock new opportunities in MSME financing and drive meaningful impact across Bharat.

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