Fintech Lender Aye Finance raises Rs 125 Crores from Dutch entrepreneurial development bank FMO
FMO will work closely with Aye Finance to expand their services to women entrepreneurs in the country
Leading fintech lender, Aye Finance, has raised Rs 125 crores in debt from Dutch entrepreneurial development bank – FMO, through the issuance of Non-Convertible Debentures. With the recent fundraise Aye is gearing up to bolster its lending portfolio and expand the outreach in providing credit specifically to women-owned microenterprises in India. In addition to providing debt, FMO will work closely with Aye Finance to expand their services to women entrepreneurs in the country through a Gender Finance program. This transaction was syndicated and executed by Chennai-based Northern Arc Capital, a leading debt investor and platform in the credit segment.
Micro enterprises are at the bottom of the MSME hierarchy of businesses and Aye’s mission is linked to raising this financially excluded sector and bringing it into the folds of organized finance. The MSME lender has designed its acquisition and credit assessment processes that mirrors the comfort of the micro entrepreneur, and is fast emerging as the leader in micro lending space having disbursed over Rs 2500 Crores to over 1,80,000 customers and has a loan book of Rs 1430 crores.
In the last financial year Aye closed two rounds of equity, raising Rs 380 crores and became the only finance company in India to be backed by CapitalG (erstwhile Google Capital) Alphabet Inc.’s Growth Equity Investment Fund. Other marque investors supporting Aye in its mission to enable financial inclusion of base of pyramid businesses are SAIF Partners, Falcon Edge, Accion, LGT and MAJ Invest. Equally impressive has been Aye Finance’s ability to diversify the borrowing profile and raise significant liabilities over the last 12 months, when the NBFC market has been strapped for cash. This is a result of the growing credibility of Aye Finance as a leader in the MSME financing segment, and also a testament to the significance of their work in attracting leading impact-driven investors around the world.
Mr. Sanjay Sharma, MD and Founder of Aye Finance said, “While we have women as co-applicants for over 95% of our loans, we believe we can do more in enabling the women micro enterprises of India to bring about a more transformative impact on the economy. We expanded our branch network this year to the states of Bihar, Jharkhand, Gujarat & Maharashtra which have a prevalence of women entrepreneurship and with these funds from FMO we will be supporting the growth of women led enterprises in these states as well in the other 14 State that we have our presence.”
FMO is the Dutch entrepreneurial development bank, with a mission to empower entrepreneurs to build a better world. As a leading impact investors, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a close to 50-year proven track-record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.7 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally.
Linda Broekhuizen, Chief Investment Officer FMO said: “We are proud to onboard Aye Finance as a client of FMO. The debentures issued by Aye are particularly interesting as the on-lending will be to micro entrepreneurs, of which half will be dedicated to women entrepreneurs in the financial inclusion area of underbanked end clients. FMO’s partnership with Aye therefore significantly contributes to SDG 5, gender equality and SDG 10, reduced inequalities.”
Dr Kshama Fernandes, Chief Executive Officer of Northern Arc Capital, said: ‘’Northern Arc is excited to have played a role in this landmark transaction that aims to encourage and support women entrepreneurship. We have always been committed to address the prevailing gender imbalance in employment and entrepreneurship opportunities. We believe that Aye Finance, through their unique and tested delivery model, are best positioned to work towards this objective.”
Incorporated in 2014, Aye Finance has become a key disruptor to lending in the MSME segment through their lending approach – identifying viable business clusters around the country and extending credit to buyers, suppliers and manufacturers in the identified clusters.
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