FMO, the Netherlands’ development finance company, plans to make a debt investment of $18.2 million (Rs 125 crore) in Indian non-banking financial company Aye Finance Pvt. Ltd, according to a disclosure.
The loan will support the expansion of Aye’s loan portfolio in India, FMO said in a disclosure. The loan will also support Aye’s loan expansion to women-owned enterprises, it added.
This is the second round of debt funding raised by the non-banking financial company (NBFC) in 2019.
In January, Aye Finance raised Rs 71 crore in debt funding from Swiss asset manager responsAbility Investments AG and homegrown firm Northern Arc Capital..
Aye Finance has a market presence in Bihar, Jharkhand, Gujarat and Maharashtra. These states have a potential to expand women entrepreneurship market which apparently is also the focus of FMO. For the same, FMO provides technical assistance to increase Aye Finance’s reach into the women market.
The lender, incorporated in 2014, focuses on micro, small and medium enterprises. So far, the company has raised a little over $100 million ($700-725 crore) through a combination of debt and equity infusion by SAIF, CapitalG, Accion and LGT. Its investors include Google parent Alphabet Inc.’s growth equity fund CapitalG, SAIF Partners, Accion International and LGT Impact Ventures.
Last year in June, VCCircle reported that Aye Finance had raised Rs 147 crore ($21.5 million) in a Series C round of funding from CapitalG, SAIF and LGT to grow its business..
In November 2018, Aye Finance had raised $10 million by issuing debentures to Switzerland-based impact investor BlueOrchard Finance – the second such transaction between BlueOrchard and Aye Finance in 2018. BlueOrchard had offered $4.6 million in debt in March last year.
A report by ratings firm ICRA said Aye Finance identifies business clusters and performs preliminary market research to understand the dynamics of the cluster by interacting with buyers, suppliers and manufacturers. Once a cluster is selected, the company opens a branch and starts lending to that cluster.
Aye Finance, which operates in 11 states with 104 branches, provides working capital and business development loans. It has disbursed over Rs 1,250 crore to more than 1 lakh customers, according to the company.
TAGS: AYE Finance, CapitalG, SAIF Partners, ResponsAbility Investments, FMO