We Have Maintained Contact With Our Customers Through Our In House Customer Service Tele Calling Team: Sanjay Sharma, Aye Finance

In an exclusive interaction with BW Businessworld, Sanjay Sharma, MD, Aye Finance talks about the company and more.

How has your business been affected due to the COVID-19 crisis and how are you dealing with it? 

Our choice of customers is the micro-enterprises, that lie at the bottom of the pyramid, and our experience of lending to them for over 6 years shows that they are far more resilient than the organized sector in many ways. They have very little sunk capital, have very frugal expense bases and their cash cycle is often less than 14 days. Hence, they will possibly handle the business aftermath from COVID with their usual resilience. We have been focusing our efforts in the months since the lockdown on collections and have seen the collections numbers improve drastically over these months, validating this belief. Also, only 25 per cent of customers had sought a moratorium from us. The good collection figure in June gives us a lot of confidence and we are now getting ready to start offering credit lines to micro-enterprises who will need affordable and adequate funds to prepare for the upcoming festival season.

What are the plans for the company? 

We just closed our Series E Equity round of INR 210 crores, which was led by CapitalG, and have also raised debt lines from multiple leading global investors. This has provided us ample liquidity and we are looking to start disbursing by end of this month. We recorded about 80 per cent growth in our overall loan portfolio in FY19-20 and are expecting 25-30% growth this year, despite the pandemic disrupting the economy.

With respect to the current situation, how does your company plan to provide loans to people? 

From a thirty thousand feet view, most of the MSME businesses may look similar but there is a significant difference between businesses within these classifications – while many may close shop, there will be significant numbers that will weather this storm depending on how they are managed and what products and services they offer. 

We are naturally positioned to ascertain which businesses will successfully tide through this unprecedented crisis, as we lend using the cluster-based approach. Our data science team has designed advanced statistical models and Artificial Intelligence-based predictive algorithms leveraging the extensive data of over two lacs customers we have served in 18 Indian States. We have also had our ear to the ground through our field teams that have kept in touch with our customers since the lockdowns were announced. We have corroborated the details collected by the field teams with the data analytics simulations, and designed sourcing channels and product lines which will be of value to the micro-entrepreneurs in the post COVID era.

In the pandemic what are the recent developments, your company has made?

We recently raised Rs 210 core in Series E equity round, and I believe closing major funding round during these times of economic uncertainty reinforces the value that our investors see in Aye Finance. We continued to raise debt lines even post the lockdown enforcement and raised over INR 350 crores in debt from leading lenders in India and abroad. 

We were ranked 14th amongst the top 100 Best Places to Work, by Great Place to Work Institute, a globally recognized authority in creating, assessing, and identifying the best workplaces, across the globe. 

Despite the disruptions brought on by the onset of COVID-19, we have shown improving operating ratios in the first quarter of FY20-21, on the back of our quality-lending book. 

We have maintained contact with our customers through our in house Customer Service Tele calling team, which has been educating the customers on the benefits of meeting their EMI obligations along with providing them guidance and information through this time of disruption

What are the goals of your company for the year 2020? 

We are expecting to close the year with an asset book of over Rs 2000 crore, adding more micro-enterprises from the underserved sector into the folds of the formal economy. Our profits for the fourth consecutive year will remain in black, notwithstanding the economic crisis emanating from COVID-19. 

What are your thoughts about the Fintech industry in 2020?

The financial year will be a test of resilience for large as well as small businesses across India. For fintechs that are already stressed, this scenario will be an existential challenge. However, the fintechs that are well managed and have diversified portfolios will possibly find an opportunity to march on and improve their market share. Fintechs that have invested in the delinquency management process will be less impacted but new Fintechs who have not paid enough attention to delinquency collections arrangements may be getting worried now. 

Q7. How do you look at the expansion of the firm? 

In 2014, we started with one branch in one city and since then we have been adding more geographies expanding our reach to offer affordable and customized credit solutions to the micro-enterprises, and today we have a presence in 18 States through our 173 branches. We will continue to expand our reach this year as well extending credit offerings that are of value to the segment in the post COVID times as well.

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