Mumbai, NFAPost: Aye Finance, a financial service startup, has bagged Rs 77 cr ($10 Mn) in debt from Catalyst Trusteeship through its AAV Sarl and Masala Investment Sarl.
As per the filings of the Ministry of Corporate Affairs, Aye Finance has assigned 3,85,875 debentures each worth Rs 38.58 Cr to AAV Sarl and Masala Investment Sarl, leading up to Rs 17.17 Cr.
Before this round, in July 2020 the company had also raised Rs 125 Cr in debt from Germany-based impact investor Invest in Vision.
Founded by Sanjay Sharma and Vikram Jetley in 2014, Aye Finance caters to unbanked micro-enterprises of India by offering B2B loans. The company is currently offering its services in 14 states and plans to expand into Bihar, Jharkhand, Gujarat and Maharashtra in the coming years. The company has over 173 branches and 2,900 employees.
Sanjay Sharma said the company has disrupted the status quo with innovative credit assessment methods that do not rely on traditional business documentation and methods.
“We have leveraged the advancement in data analytics and technology to not only make sound risk assessments but also simplify the lending process, reduce their borrowing costs, and enhance customer experience,” says Sanjay Sharma.
He also highlighted the fact that micro-enterprises have little documentary proof of their business income, which makes underwriting such businesses a big problem.
“With loans often between Rs 50,000 and Rs 100,000, it is important to design processes and automation that execute the disbursal of these loans at minimal costs,” says Sanjay Sharma.
Gurugram-headquartered fintech founder also highlighted that acute shortage of working capital has long been an existential pain point of micro-enterprises.
“Aye is solving this through its innovative cluster-based underwriting, by making a ground-level connect with India’s thriving MSME sector, and offering customised business loans to micro-enterprises,” Sanjay Sharma.
Till date the company has provided two lakh loans which amounts to Rs 2700 Cr to nearly 196K small scale businesses in the country. In the financial year 2020, the company doubled its revenues and increased its loan book from 1,047 Cr to 1,800 Cr, the company’s cofounder and managing director Sharma said.
Aye Finance has raised about $261.7 Mn to date in a mix of debt and equity. The lender is equity funded by CapitalG, SAIF Partners, Falcon Edge, LGT, A91 Partners, and MAJ Invest, and has debt lines from FMO, BlueOrchard, responsAbility, SBI, ICICI Bank, HDFC and many others. The company was valued at Rs 1,700 Cr ($224 Mn) in a Rs 210 Cr ($27 Mn) in Series E funding round from existing investors in June 2020.