Delhi-based non-banking finance company (NBFC) Aye Finance Pvt Ltd has secured Rs 20 crore (around $3 million) in follow-on-investments from investment firm SAIF Partners and Accion, a global non-profit organisation that supports microfinance institutions.
The new investment from the existing investors will help the financial services startup to provide micro, small and medium enterprises (MSMEs) in the country with expanded access to financing, it said in the statement.
“Aye Finance’s new-age mobile and cloud computing model cuts operational costs and ultimately allows more of the tens of millions of micro enterprises throughout India to find the financing that they need,” said Sanjay Sharma, managing director, Aye Finance, in a statement.
The two investors had co-invested an undisclosed amount in Aye Finance earlier this year.
Both Accion and SAIF Partners will assist Aye Finance strengthen its existing operating base by refining its underwriting processes and risk analysis, improving data analytics, assisting with product development, and encouraging broader industry engagement.
“Our growing customer base underscores the need for this service, and the continued growth of India’s industrial segment will ensure the long-term demand for responsible, affordable financing,” the statement added.
Last year in April, early stage impact investment firm Contrarian Drishti Partners, along with its founder Somak Ghosh, invested an undisclosed amount in the NBFC.
Aye Finance has already raised debt funding from a group of funding organisations like IFMR, Intellegrow, MAS Financial Services and a number of banks.
Aye Finance was founded by two former executives of microfinance institution Ujjivan Financial Services—Sanjay Sharma and Vikram Jetley. Prior to this, Sharma was COO of Ujjivan while Jetley was responsible for leading the microlender’s business in the north region and individual lending across India. Sharma is an alumnus of IIT Bombay and IIM Bangalore, while Jetley is a management graduate from FORE School of Management, Delhi.
Aye Finance offers loans to micro enterprises with investments in plants and machinery of less than Rs 25 lakh and services enterprises with investments not exceeding Rs 10 lakh. Aye Finance’s operations are primarily in northern India.
The NBFC has expanded to 16 cities across northern India in the second year of operations.