Aye Finance secures Rs.40-crore loan from IFMR Capital

Aye Finance has announced securing Rs.40-crore as Term Loan from IFMR Capital. These funds will be used by the MSME Lender for on-lending.

During the current financial year, Aye Finance has raised Rs.250 crore in debt from India’s largest PSU Bank SBI, Mahindra & Mahindra, Hinduja Leyland Finance and leading global impact investment managers – Blue Orchard, Triodos Investment Management and Symbiotics.

Aye Finance (P) Ltd has innovated a unique cluster-based methodology that utilizes the deep insights of the operations of a business cluster to make good lending decisions despite the absence of business accounts, credit histories or banking track records. It makes effective use of various data science tools – psychometric profile tools, behaviour-based statistical credit scores and constantly improving cluster insights, in arriving at the decision to lend to the micro and small-scale enterprises. By using crowd CRM and teaching its borrowers to use non-cash modes of repayment, Aye has been able to reduce the costs of origination and servicing of loans.

IFMR Capital aims to provide efficient and reliable access to capital markets for institutions like Aye Finance that cater to the underbanked. Last year, IFMR Capital arranged, structured and guaranteed a “Pooled Loan Issuance”, in which Aye Finance participated and for which Hinduja Leyland Finance was the investor. In addition they arranged a $12-million investment in Aye Finance by Geneva-based impact investor, BlueOrchard Finance and $7 million from Triodos Investment Management.

Commenting on the latest term facility to Aye Finance, Dr Kshama Fernandes, CEO, IFMR, said, “Over the years of association with Aye finance, we have seen them develop a high- quality sustainable business in the space they operate in. Millions of micro and small enterprises in India struggle to raise funding from formal sources. Aye Finance assesses the risks of these enterprises and offers a range of credit solutions which are affordable as well as suitable to their needs, thus playing a very important role in the evolution of these businesses."

Aye is equity funded by three reputed Venture Capital Funds – Accion International, SAIF Partners and LGT Impact Ventures. Aye opened its first branch in Delhi in the year 2014 and has been rapidly expanding every year and charting an exciting growth path in this underbanked segment while maintaining a high benchmark for credit quality. In October last year, Aye Finance announced that it plans to raise $25-$40 million by March 2018 to fuel its expansion plans.

Aye’s leadership is rallied around the vision to become an admired financial institution with a leadership position in micro and small enterprise lending. Through the use of innovative data models and technology supported by an engaged team that focusses untiringly on customer delight, Aye is working to live up to its vision.