22nd November, 2016, New Delhi, India – Aye Finance Private Limited (‘Aye Finance’), has raised INR 70 crores (USD 10.5 million) in its Series B capital raise from LGT IV and its existing investors SAIF Partners and Accion. Aye was founded in 2014 by Sanjay Sharma and Vikram Jetley and offers loans to micro and small enterprises (‘MSME’) across India. LGT IV is a global impact investor supporting organisations with financial capital in the form of equity, debt and grants.
Aye Finance has 31 branches across 7 states in North and South India and aims to launch 30 more branches across states like Uttar Pradesh, Rajasthan, Andhra Pradesh, Gujarat and Maharashtra by December 2017. Aye targets a loan portfolio of more than INR 2,000 crore over the next five years.
The MSME sector in the country comprises more than 58 million enterprises, employs more than 111 million people and contributes 37% of the country’s GDP. Given the unorganized nature of the sector, there is more than INR 3 trillion of debt gap which is constraining the MSMEs from expansion. Aye Finance is one of the very few lenders in the country that is able to effectively and profitably address the debt requirements of this sector and has been growing at more than 10x for the past two financial years while maintaining superior asset quality.
Aye Finance uses an innovative industry cluster based approach to access and evaluate borrowers and is catering to the credit needs of more than 35 industry clusters across the country. The loans given are in the range of INR 50,000 to INR 25 lakhs and help meet the capex and working capital needs of the borrowers.
Unitus Capital was the exclusive advisor to Aye Finance for this transaction.
Commenting on the recent fund raise:
“We are happy to be partnering with LGT IV for the next stage of our growth. Our existing investors, SAIF and Accion have also demonstrated continued faith in us and contributed significantly in the current round. LGT, SAIF and Accion have a proven track record of supporting financial institutions like ours and we look forward to our partnership as we take Aye Finance to its next stage of growth to achieve our common vision of providing comprehensive financial and other services to small and micro enterprises who are the engines for inclusive growth of the country” – Sanjay Sharma, Co-Founder, Aye Finance
“Financial Inclusion is one of the focus areas of the current government and the sector is poised to grow many-fold. Aye Finance is one of the pioneers in the MSME lending segments in the country and their current equity raise is a validation of their robust business model, enlightened leadership and the strong institution built by them. We look forward to seeing this partnership grow and are excited for what it will achieve for all stakeholders.” – Eric Savage, Co-Founder and CEO, Unitus Capital