Aye Finance, which lends loans to micro and small businesses, has received nearly $3 million (Rs 20 crore) in funding from Accion, a global nonprofit organization that supports micro-finance institutions, and venture capital firm SAIF Partners, according to statement.
The funds will help the financial services startup provide India’s micro and small enterprises (MSMEs) with enhanced financial services. Currently, India’s MSME sector represents nearly 58 million businesses, creates 150 million jobs, and accounts for 45% of the country’s industrial output.
“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. Our loyal and 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,” said Sanjay Sharma, managing director of Aye Finance.
Aye Finance, which is operational in North India, has already raised debt funds from a diversified group of top tier funding organizations like IFMR, Intellegrow, MAS Financial Services and a number of banks.
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.
“We must find more efficient ways to provide Indian small businesses with the capital they need to grow. If we succeed, we can help entrepreneurs launch, sustain and expand their businesses. Aye Finance’s industry cluster approach is an exciting innovation that can help open up great opportunity for those small businesses unlikely to get bank financing,” said Accion President and CEO Michael Schlein.
In its second year of operations, Aye Finance has expanded to 16 cities across northern India and plans to continue expanding in the coming year.
Image Credit: Freedigitalphotos.net