MSME financing start-up Aye Finance raises $8 million from Blue Orchard

Key highlights:

• Aye Finance has raised $8 million from Blue Orchard
• The funds were raised through NCDs with a maturity period of five years
• Aye services India’s thriving MSME sector

Non-banking finance company (NBFC), Aye Finance has raised $8 million from Blue Orchard, a leading global impact investment manager. The funds were raised through NCDs (non-convertible debentures) with a maturity period of five years.

Aye Finance says it is committed to transforming micro and small enterprise financing in India. It is headquartered in Gurgaon and serves the credit worthy albeit the underserved MSME sector through a network of 39 branches.

Founded by professional bankers Sanjay Sharma and Vikram Jetley in 2014, Aye has made a ground level connect with India’s thriving MSME sector and offers customized and innovative financial products to match the sectors’ business needs.

Blue Orchard, which is headquartered in Switzerland, was founded in 2001 by initiative of the UN as the first commercial manager of microfinance debt investments worldwide. They offer premium investment solutions to qualified investors and provide debt and equity financing to institutions in emerging and frontier markets.

Through this lending, Aye Finance and Blue Orchard are enabling the financial inclusion of millions of small businesses across India presently locked out of the financial system, the company said.

Sanjay Sharma, Managing Director, Aye Finance said “Aye Finance distinguishes itself by utilizing technology in mitigating the challenges faced by MSMEs in securing loans. By deploying a cloud-computing architecture and data science methods to derive insights about each of our industry clusters, we are able to bring down the cost of delivery and offer credit solutions at affordable rates to the micro and small enterprises. It is part of Aye Finance’s vision to leverage technology prowess of today for improving the productivity of field force, detecting frauds, profiling risks and exercising dual control on processes. These additional funds from Blue Orchard will be utilised to further strengthen our funding position and allow us to facilitate the inclusion of a larger number of micro and small businesses in the realm of mainstream economy”

In March this year Aye Finance received a credit facility of $3.1 million from SBI and in November last year it had raised $10 million (Rs 70 crore) in Series B Equity led by LGT IV, SAIF Partners and Accion.