Aye Finance eyes USD 25-40 mn funding to fuel expansion spree

New Delhi [India]: Aye Finance, Gurugram-based lender to the micro and small sector enterprises is in advanced talks with investors to raise USD 25 to 40 million as part of Series C funding by end of the current financial year.

Aye Finance has been on a rapid expansion spree, and to achieve its target of a loan book of Rs. 400 crores for FY 2017-18, it has more than doubled its footprint from 33 branches to 72 branches in 10 Indian States.

The company aims to utilise the additional funds it raises to service the clusters better by making a last mile connect with the enterprises operating there to enable their inclusion in the formal economy.

Aye Finance provides a line of credit to the micro and small businesses in tier II and beyond cities in India. It uses a unique cluster methodology to assess the credit worthiness of these enterprises that often have asymmetrical or missing business records.

With the opening of these 39 new branches, it is now able to services over 50 clusters in the states of Madhya Pradesh, Andhra Pradesh, Delhi, Uttar Pradesh, Haryana, Rajasthan, Punjab, Uttarakhand, Tamil Nadu and Karnataka.

“We have signed non-disclosure agreements with several private equity funds based out of US, Europe and India. We will require these additional funds by the first quarter of the next financial year as by then we would have already leveraged three to three and half times our equity. The challenges facing the MSME Sector in procuring funds to fuel their growth are being successfully addressed by us,” said MD and founder of Aye Finance, Sanjay Sharma.

“We have designed customised and innovative products to match the micro and small businesses and to circumvent the obstacle of missing or limited credit information, we have deployed cloud-computing architecture and data science methods to derive insights about each of the industry clusters they service,” he added.

Aye Finance has already raised over Rs 150 crores in debt in the current financial year from India’s largest PSU Bank SBI, Mahindra & Mahindra, Hinduja Leyland Finance and leading global impact investment managers Blue Orchard and Triodos Investment Management. It is equity funded by three reputed Venture Capital Funds – Accion International, SAIF Partners and LGT Impact ventures. (ANI)