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Impact investor BlueOrchard offers more debt funding to microlender Aye Finance
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Non-banking financial company Aye Finance has raised Rs 72 crore ($10 million at current exchange rates) in debt funding from Switzerland-based impact investor BlueOrchard Finance.

Aye Finance will use the money to enhance its credit portfolio, the company said in a statement on Tuesday.

This is the second transaction between BlueOrchard and Aye Finance this year. In March, the NBFC had raised Rs 30 crore ($4.6 million) in debt funding from BlueOrchard.

Gurugram-based Aye Finance provides working capital and business development loans to micro and small enterprises using a cluster-based approach, supported by a proprietary underwriting methodology. It operates in 11 states and has 104 branches.

An October 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 was founded in 2014 by Sanjay Sharma and Vikram Jetley, both former executives at Ujjivan Financial Services, the holding firm for Ujjivan Small Finance Bank.

As on 31 March 2018, the company’s loan book stood at Rs 470 crore.

In June, Aye Finance had raised Rs 147 crore ($21.5 million) in a Series C round of funding from Alphabet Inc’s growth capital arm CapitalG as well as existing investors SAIF Partners and LGT Impact Ventures.

Apart from this year’s transactions with BlueOrchard, Aye Finance had raised $8 million (Rs 52 crore) from the Swiss impact investment manager last year.

An initiative of the United Nations, BlueOrchard was founded in 2001 as the commercial manager of microfinance debt investments. Its offers debt and equity financing to institutions in emerging markets. It has a presence in four continents, and has invested more than $5 billion in 350 institutions across 80 countries till date.

In September, New Delhi-based microlender Satya MicroCapital Ltd raised Rs 34 crore ($4.7 million) from BlueOrchard Finance.

BlueOrchard has also backed other Indian microlenders such as Svasti Microfinance and SV Creditline in the past.

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