Aye Finance Secures INR 137 Cr Debt From German Impact Investor

Fintech lending startup Aye Finance has raised debt funding of INR 137 Cr from German impact investment and portfolio management firm Invest in Visions.

The infusion came from IIV Mikrofinanzfonds and another private fund managed by Invest in Visions, with support from Agents For Impact (AFI), Aye Finance said in a statement.

This comes months after the startup raised INR 310 Cr in a Series F funding round led by the UK’s British International Investment (BII) in December.

This fresh capital will enhance Aye Finance’s capacity to offer vital financial assistance to underserved MSMEs throughout India. The funds will further be used for on-lending to these businesses, enabling them to grow and contribute to the economic development, the statement added.

“…This new funding will allow us to reach out to a larger population of micro enterprises and offer them innovative financial products designed to meet the diverse needs of MSMEs. We are confident that this will enable us to empower even more entrepreneurs and unlock their full potential, ultimately contributing to job creation and economic prosperity across the country,” said Krishan Gopal, CFO, Aye Finance.

As per the startup, the collaboration among Aye Finance, Invest in Visions and Agents for Impact will empower MSMEs and enhance financial inclusion in India. 

Camellia Genova, senior portfolio manager at Invest in Visions said, “We very much appreciate our cooperation with Aye Finance in their mission to provide socially responsible funding to MSMEs in India, which are traditionally underserved by banks and often grown out of microfinance.”

Founded in 2014 by Sanjay Sharma and Vikram Jetley, Aye Finance offers affordable business loans to microenterprises in the country. It uses cluster-based credit assessment with AI algorithms to assess risk in the absence of traditional business documents.

Last month, the startup said it had provided over INR 10,000 Cr in loans to small businesses in India, reflecting its commitment to supporting them and promoting inclusive growth. It also claims to have an active client base which exceeds 4.5 lacs micro enterprises and an AUM of over INR 4,000 Cr.

Meanwhile last year, the startup reported that its Q1 FY24 profit after tax stood at INR 38.67 Cr, up 4X from INR 9.78 Cr in Q1 FY23.

The startup backs microenterprises in manufacturing, services, trading, job work, and dairy segments and competes with ftcash, ARTH, FlexiLoans, Lendingkart, LenDenClub and Kinara Capital in the lending tech space.