Global impact investor, BlueOrchard, has invested Rs 87 crore in micro, small and medium enterprise (MSME) lender, Aye Finance, as part of a debt financing round. The funds will be used to roll out several affordable and customizable credit solutions for the small business sector and empower them.
The fintech startup aims to raise Rs 1,500 crore in total during the current year. It has already raised Rs 700 crore so far. In September, Aye Finance raised Rs 65 crore from Geneva-based Symbiotics Investments. It was also a round of debt.
The Gurugram-based company that provides unsecured loans to MSMEs was founded in 2014 by Sanjay Sharma and Vikram Jetley. It is also backed by investors such as Capital G (formerly Google Capital), Elevation Capital, Falcon Edge, A91 Partners, etc.
Commenting on the fundraising, Sharma, who is also Managing Director of Aye Finance, said: “Aye is uniquely positioned to provide low-cost, personalized credit solutions to over 60 million micro-enterprises that have been overlooked by traditional lending channels as our innovative solutions. and process automation brings unexpected savings to our business.
Additionally, Pranav Murari, Senior Investment Manager at BlueOrchard (Asia), noted that they back Aye Finance because it “serves a customer segment that has been largely underserved.”
The Indian MSME segment plays an important role in India’s growth trajectory. It contributes around 30% of India’s GDP and 45% of India’s exports and is also the second largest employer of labor after agriculture, according to data shared by the Ministry of Micro, Small and Medium Enterprises. Prime Minister Narendra Modi has often stressed the critical role this sector will play in helping India become a $5 trillion economy.
Aye Finance closed the last financial year (FY2022) with a loan portfolio of Rs 1730 crore. It aims to disburse loans worth Rs 2,400 crore in all this year. Since its inception, it claims to have served 40,000 micro-entrepreneurs.
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