Aye Finance Raises $10 Mn To Boost Micro-Lending Portfolio In India

Fintech lending company Aye Finance has raised $10 Mn (INR 71.32 Cr) in a debt funding round from global impact investment manager, responsAbility and Northern Arc, through the issuance of non-convertible debentures. This is the twelfth debt funding round raised by Aye Finance so far.

The company has raised a total of $102.25 Mn (INR 727.5 Cr) as a combination of equity and debt funding since its inception in 2014.  The venture is equity funded by four venture capital funds including SAIF Partners, CapitalG, Accion International and LGT.

With this latest fund raise, Aye Finance is gearing up to bolster its lending portfolio and offer affordable business loans to a larger number of micro-enterprises in India.

Aye was founded by Sanjay Sharma and Vikram Jetley and operates through 104 branches spread across 11 Northern, Central and Southern states. Along with enabling the micro businesses through its credit solutions, the lender is also offering digital book-keeping app and advisory services to help them run their businesses efficiently.

Micro-enterprises are at the bottom of the MSME hierarchy of businesses and Aye’s mission is linked to raising this financially excluded sector and bringing it into the folds of organised finance.  The company has so far disbursed over $175.2 Mn (INR 1,250 Cr) to over 100K customers.

“The MSME sector is a key and crucial growth driver of the Indian economy and a significant financing opportunity for specialized lenders like Aye Finance, that possess a deep understanding of the businesses it serves as well as their financing needs,” added Dr Kshama Fernandes, chief executive officer of Northern Arc Capital.

Sharma believes that their cluster-based credit assessment methodology has the capability to scale up rapidly while delivering good value to their customers. By deploying a cloud-computing architecture and automating front-end (eCRM), Aye Finance is able to bring down the cost of delivery.

“It is part of Aye Finance’s vision to leverage technology prowess of today for improving the productivity of field force, detecting frauds and exercising dual control on processes,” he added.

According to Inc42 DataLab’s Indian Tech Startup Funding Report 2018, fintech startups gained $1.4 Bn in funding last year, making it one of the top-funded sectors in 2018.  Lending startups like Lendingkart and Incred were among the top funding grossers in the lending-tech segment.

Some of the major competitors of Aye Finance include ZestMoney, i2iFunding, and LoanTap.