Small business lender Aye Finance Pvt. Ltd on Tuesday said it has raised ₹ 125 crore in debt from Dutch development bank FMO — its second such debt infusion in the last three months.
FMO said it will work closely with Aye Finance to expand services to women entrepreneurs in the country through a Gender Finance programme. This transaction, where Aye raised non-convertible debentures, was executed by Chennai-based Northern Arc Capital, also an existing investor in Aye Finance.
“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,” said Sanjay Sharma, managing director of Aye.
Aye Finance generally lends ₹1-2 lakh to businesses with a turnover of ₹10-30 lakh a year. It has raised about $70 million in equity so far, including about $36 million in a Series D round from US-based Falcon Edge Capital, Alphabet’s investment arm Capital G, and venture capital firm SAIF Partners.
It last raised $10 million in debt from responsAbility Investments AG, a Swiss impact investor in August this year.
Aye has also managed to grow and keep a relative check on defaults in what has been a testing time for the non-banking financing industry, which has been bogged down by a severe liquidity crunch and has seen a number of high scale defaults at institutions such as Dewan Housing Finance Ltd. and Altico Capital among others.