With this fresh investment, Aye’s total equity funding since inception exceeds Rs 690 crores.
“Closing major funding round during these times of economic uncertainty reinforces the value that our investors see in Aye Finance. Our loans are underwritten with cluster insights and this continues to assure good repayment behaviour in our portfolio. This equity investment will further add to liquidity that will enable us to emerge strongly from the COVID crisis and continue to benefit millions of micro-enterprises across India,” Sanjay Sharma, Managing Director, Aye Finance said.
Started by Sanjay Sharma in 2014, Aye Finance typically infuses Rs1-2 lakh into businesses with an annual turnover of Rs10-30 lakh. It underwrites the risks in these loans with a unique cluster-based model, wherein it evaluates all the people in a particular field, say, automobile workers or textile workers, and correlates behavioural tendencies.
Aye Finance claims to have disbursed Rs3000 crore transforming the micro-enterprise lending landscape and brought over 200,000 unorganised businesses into the formal lending ecosystem. Despite the disruptions brought on by the onset of COVID-19 that adversely affected the MSME sector, Aye has shown improving operating ratios in the first quarter of FY20-21, on the back of its quality lending book, the statement said.
“Aye Finance’s continued success is a testament to their industry leadership, their underwriting methodology, which combines an optimal mix of data science with a physical presence in the field, and their ability to empower a huge, unaddressed market,” said Sumiran Das, Board member and Partner at CapitalG.
In January this year, A91 Partners invested about $20 million in Aye Finance through a secondary sale of shares, acquiring the stake of Accion, Mint reported. In December, it had raised Rs107 crore as debt funding from Switzerland-based impact investor BlueOrchard.