Aye Finance Raises Rs 44 Cr from Triodos Investment Management
Second foreign investment facilitated by IFMR Capital for Aye Finance; after a INR 80 crore debt investment by Impact Investment Manager, Blue Orchard
Chennai-based IFMR Capital has successfully executed the issuance of Non-Convertible Debentures (NCDs) aggregating to Rs. 44 crore for Aye Finance. The NCDs were subscribed to by Triodos Investment Management, a pioneering global impact investment manager and asset management arm of Triodos Bank, one of the world’s leading sustainable banks. These NCDs have a tenor of 6 years and thereby, provide long term financing for the company. Aye Finance plans to use these additional funds to increase its asset book and bolster expansion plans.
This is the second foreign investment deal facilitated by IFMR Capital for Aye Finance, after an INR 80 crore debt investment by Impact Investment Manager, Blue Orchard in May this year.
Aye Finance, headquartered in Gurugram, caters to Micro and Small Enterprises in India. It has 72 branches across 10 states of North and South India. As of March, the company had an AUM of over Rs. 130 crores and targets Rs. 430 crores in assets under management for FY18.
In India, many institutions addressing the needs of financially excluded segments face challenges in terms of access to institutional credit themselves. For almost a decade now, IFMR Capital has been playing the role of a dependable bridge for such institutions, enabling them to raise funds from capital markets. “The transaction reinforces our belief in the strong quality and growth prospects of small businesses in India. We will continue to meet the requirements of these businesses by providing access to capital through our structured finance approach through which we have enabled hundreds of institutions to reach to an ever growing base of investors”, said Dr. Kshama Fernandes, Chief Executive Officer of IFMR Capital.
Despite contributing to 45 percent of the country’s GDP, only 4% of the 58.5 million MSMEs receive formal finance. There is clearly a significant “missing middle” segment, left out by the mainstream credit delivery channels and institutions like Aye Finance are building specialised models of lending to small businesses and enterprises to actively bridge the gap.
Mr. Sanjay Sharma, Co-Founder and Managing Director, Aye Finance, said “Aye is solving the pain point of Micro Enterprises by offering customized and innovative financial products to satisfy their needs. We have, in the last three years, impacted an ecosystem of over one lakh families through our business enterprise loans and these additional funds will bring us one step closer to our vision to impact over one crore households by 2020. ”
For Triodos the transaction in Aye Finance serves as another landmark in providing access to capital for financially excluded small businesses in India. Commenting on the investment, Aditya Mohan, Investment Officer, Triodos Investment Management said “At Triodos, we see ourselves as catalysts in expanding access to finance by working with companies that are the frontiers of financial services in emerging economies. As a provider of much needed credit to SMEs in India, Aye Finance is a natural partner for Triodos in facilitating job creation and supporting the ubiquitous small-scale entrepreneurs of ‘middle India’.
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