SBI Extends over Rs 30 Cr in Debt to the MSME Lender, Aye Finance

Aye Finance, a Fintech lender to the MSMEs, has raised over Rs 30 Cr from SBI, the largest PSU Bank in India. This debt facility will be used by Aye to offer affordable line of credit to the micro enterprises and enable their inclusion into the mainstream of the economy. This is the second time SBI has extended a debt facility to Aye, reaffirming its faith in the lender’s ability to transform micro and small scale enterprise financing in India.

Aye Finance was founded by bankers Sanjay Sharma and Vikram Jetley in 2014 and since then it continues to chart an exciting growth path in this under banked segment while maintaining a high benchmark for credit quality. Aye uses a unique “Cluster Based Credit Assessment” methodology to underwrite the risk of lending to the micro businesses, who have always been ignored by banks and financial institutions. The fintech lender also derives lending insights from alternate data and deploys low cost mobility and cloud based technologies to reach out to India’s thriving and underserved micro businesses.

Commenting on the latest fund raise, Sanjay Sharma, Managing Director of Aye Finance said “We are grateful to SBI for instilling the faith in us second time around and offering us a debt facility which will allow us to empower a larger number of such enterprises. Having successfully integrated fin-tech with fin-touch we are reaching out to the 5 crore unorganized micro enterprises, and these additional funds will help us further in increasing our reach and bringing the “missing middle” into the folds of organised lending.”

Aye is equity funded by three marque investors–Accion, SAIF Partners and LGT, and is in advanced talks with investors to raise additional $20-25 million by the end of the current quarter.Along with SBI as its debt partner, Aye has over a dozen prominent names in the global as well as Indian financial circles which have extended the lender debt facility for onward lending.Aye has over 1000 employees and has established a network of 72 branches in 10 Indian States to hand hold the borrowers through the pre and post loan process.

Aye is setting new standards in building a quality loans portfolio in an inclusive manner and is well on its way of achieving its vision of being the most admired and a leader in the micro and small business lending space.

In April, Aye Finance received Rs 30 Cr in debt funding from Swiss-based impact investor, BlueOrchard Finance Ltd. 

In February, Aye Finance announced raising Rs 25 Cr through a securitization deal which was facilitated by Vivriti Capital. Three investors participated in the deal including stellar names like Hinduja Leyland Finance and Intellegrow. This is the second securitization deal for Aye Finance. Last year in July, Aye had raised Rs 10 Cr by securitizing part of its portfolio. 

In January, the firm has secured Rs 40 crore as a term loan from IFMR Capital. 

Just yesterday, PayMate, an early pioneer in India’s payments industry and a leading player in electronic Business-to-Business (B2B) payments space, announced the acquisition of Z2P (Zaitech Technology Pvt. Ltd.), a digital lending platform which provides hassle-free and real-time credit using social and banking data along with proprietary analytics and AI. 

The other Indian players operating in the space are i2iFunding.com, Finzy, Funding Societies, OpenTap and PaisaDukan.com among others.