Small business lender Aye Finance has raised Rs 20 crore in follow-on investments from Accion, a pioneer in financial inclusion, and SAIF Partners, a leading venture capital firm.
The new investments will help the financial services start-up provide India’s micro, small and medium enterprises (MSMEs) with expanded access to financing.
“Aye Finance’s new-age mobile and cloud computing model cuts operational costs and ultimately allows more of the tens of millions of micro enterprises throughout India to find the financing that they need,” said Sanjay Sharma, managing director, Aye Finance, in a statement.
“Our growing customer base underscores the need for this service, and the continued growth of India’s industrial segment will ensure the long-term demand for responsible, affordable financing,” the statement added.
Aye Finance’s operations are primarily in northern India.
It has already raised debt funds from a diversified group of top tier funding organizations like IFMR, Intellegrow, MAS Financial Services and a number of banks.
An optimal mix of equity and debt will go a long way in sustained scale up of the lending business.
Both Accion and SAIF Partners will assist Aye Finance strengthen its existing operating base by refining its underwriting processes and risk analysis, improving data analytics, assisting with product development, and encouraging broader industry engagement. In its second year of operations, Aye Finance has expanded to 16 cities across northern India and plans to continue expanding in the coming year. The company leverages cloud-based automation to minimize operating costs while keeping robust controls on the field. The low operating costs are expected to make the company to break even in its third year of operations, said the company.