Aye Finance Secures INR 137 Cr Debt From German Impact Investor

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

The investment was made by IIV Mikrofinanzfonds and another private fund managed by Invest in Visions, with support from Agents For Impact (AFI), as stated by Aye Finance. This funding follows the startup’s Series F funding round led by the UK’s British International Investment (BII) in December, where it raised INR 310 crore.

The newly acquired capital will bolster Aye Finance’s ability to provide essential financial assistance to underserved MSMEs across India. It will be utilized for on-lending to these businesses, fostering their growth and contribution to economic development, according to the company’s statement.

Krishan Gopal, CFO of Aye Finance, expressed, “This new funding will enable us to reach a broader segment of micro enterprises and offer them innovative financial products tailored to meet the diverse needs of MSMEs. We are confident that this will empower more entrepreneurs and unlock their full potential, ultimately driving job creation and economic prosperity across the nation.”

Aye Finance, Invest in Visions, and Agents for Impact aim to empower MSMEs and enhance financial inclusion in India through their collaboration, according to the startup.

Camellia Genova, senior portfolio manager at Invest in Visions, commented, “We appreciate our partnership with Aye Finance in their mission to provide socially responsible funding to MSMEs in India, which are often neglected by banks and frequently evolve from microfinance.”

Established in 2014 by Sanjay Sharma and Vikram Jetley, Aye Finance extends affordable business loans to microenterprises in India. It utilizes cluster-based credit assessment coupled with AI algorithms to evaluate risk in the absence of conventional business documents. The startup recently announced that it has disbursed over INR 10,000 crore in loans to small businesses in India, underscoring its dedication to supporting them and promoting inclusive growth. It boasts an active client base exceeding 4.5 lakh micro enterprises and an Assets Under Management (AUM) surpassing INR 4,000 crore.

In the fiscal year 2023, Aye Finance reported a profit after tax of INR 38.67 crore in Q1, marking a fourfold increase from INR 9.78 crore in Q1 of the previous fiscal year. Aye Finance serves microenterprises in various sectors including manufacturing, services, trading, job work, and dairy segments. It competes with other lending tech platforms such as ftcash, ARTH, FlexiLoans, Lendingkart, LenDenClub, and Kinara Capital.

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