India-headquartered Aye Finance has acquired INR 1 billion (over $14 million) in debt funding from BlueOrchard.
Aye Finance’s management noted that it will use the capital raised to further expand its line of products and services (in India), which mainly include its small to medium-sized business (SMB) loan portfolio. The debt funding is reportedly supported by CapitalG, Alphabet’s growth equity fund.
The latest investment is Aye Finance’s third round of debt funding in the last quarter, with the firm having acquired around $16.8 million from Netherlands’ development bank FMO in November of this year.
In August 2019, Aye Finance revealed that DCB Bank had invested approximately $8 million in debt funding, which was used to further expand the company’s SMB loan portfolio.
Sanjay Sharma, managing director at Aye Finance, confirmed:
“This is the sixth round of funds we have received from BlueOrchard, and I believe this demonstrates their comfort with and commitment to our business.”
He added that lending to micro-enterprises has been “a less-traveled path” for local financial institutions and Fintechs, and hence it is “satisfying to have established an innovative paradigm of our lending approach.”
He continued:
“The Aye team has demonstrated the robustness of our cluster-based lending approach, which has enabled the inclusion of close to 200,000 micro-enterprises using this approach.”
Sharma further noted that Aye Finance is planning to expand its micro- and SMB loan book with a special focus on providing underserved SMBs with better and more affordable financing options.
BlueOrchard chief credit officer Normunds Mizis said that India is an important market for the firm and one that it has been investing in for the past 20 years.
He added that BlueOrchard has been working with Aye Finance since the past couple years.
He also mentioned:
“This additional funding is testament to our conviction in the company’s mission to bridge the gap between loans offered by MFIs (micro finance institutions) and those available from commercial banks, offering (micro-SMBs) across India access to attractive credit solutions.”
