Dugar Finance Secures $5M Pre-Series A to Fuel MSME Lending Growth

A 37-year-old NBFC is rewriting the rules of small-business lending. With fresh capital and a 55% growth streak, can Dugar Finance unlock India's hidden markets?

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2026 April 16 . 11:01 AM

2 min read

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Dugar Finance Secures $5M Pre-Series A to Fuel MSME Lending Growth

Chennai-based non-banking financial company (NBFC) Dugar Finance has raised $5 million (Rs 45 crore) in a pre-Series A funding round led by HegdInvst, a Category II AIF focused on growth equity investments.

The firm previously raised about $18 million (Rs 160 crore) in structured debt from a mix of domestic and international lenders, including Symbiotics and British International Investment (BII), along with multiple Indian banks in December 2025.

Founded in 1987, Dugar Finance is focused on serving the underserved markets across tier 2-6 markets. The firm claims that it currently manages assets under management (AUM) of about Rs 400 crore, with a five-year CAGR of around 55%. It also claims to have maintained gross NPAs below 1.5% and a return on assets (RoA) of approximately 5%.

While historically anchored in commercial and passenger vehicle finance, Dugar Finance is expanding its presence in secured MSME lending, with the aim of building a more balanced and diversified loan book across both segments.

It will use the raised capital to scale its secured MSME lending franchise alongside its established vehicle finance business, and to deepen its presence across tier 2-6 underserved semi-urban and rural markets.

"We are entering the next phase of growth, where diversification and institutional disciplined scaling become critical. Vehicle finance gave us a strong foundation, and we are now leveraging that to build a broader secured lending platform," said Ramesh Dugar, Founder and Managing Director, Dugar Finance

The fresh capital will be deployed to strengthen technology infrastructure, advance analytics-led underwriting and centralised risk systems, and acquiring senior talent across critical functions.

"Dugar Finance combines a solid promoter group and a clear intent towards creating a professionally run NBFC focused on Tier 2 to 6 towns. We see significant potential in its strategy to scale a well governed & diversified secured lending platform" said Aditya Bhandari, Founder and Managing Partner, HegdInvst.

Beyond capital, HegdInvst will actively support Dugar Finance in strengthening its governance framework, access to international capital, and assisting in building their professional management team.