SBI extends Rs 30 Cr in debt to MSME lender Aye Finance

Digital lender Aye Finance on Monday announced that it has raised over Rs 30 crore from SBI. This debt facility will be used by Aye to offer affordable line of credit to the micro enterprises and enable their inclusion in the mainstream economy.

This is the second time SBI has extended a debt facility to Aye. Earlier, in May last year, the micro-lending platform said it had raised Rs 20 crore in debt funding from the PSU bank.

Founded by bankers Sanjay Sharma and Vikram Jetley in 2014 Aye uses a unique 'Cluster Based Credit Assessment' methodology to underwrite the risk of lending to the micro businesses who have always been ignored by banks and financial institutions.

The fintech lender also derives lending insights from alternate data and deploys low-cost mobility and cloud-based technologies to reach out to India’s thriving and underserved micro businesses.

Commenting on the latest fund raise, Sanjay Sharma, Managing Director of Aye Finance said,

We at Aye are passionate about solving the pain point of micro enterprises by providing them flexible yet affordable loans to fund their businesses. We are grateful to SBI for instilling the faith in us second time around and offering us a debt facility which will allow us to empower a larger number of such enterprises. Having successfully integrated fintech with fintouch we are reaching out to the five crore unorganised micro enterprises, and these additional funds will help us further in increasing our reach and bringing the 'missing middle' into the folds of organised lending.

Aye is equity funded by three marque investors – Accion, SAIF Partners and LGT Impact Ventures, and is in advanced talks with investors to raise additional $20 million - $25 million by the end of the current quarter.

Currently, the micro-lender has over 1,000 employees and has established a network of 72 branches in 10 Indian states to handhold the borrowers through the pre and post-loan process.

Just last month, Aye Finance raised close to Rs 30 crore in debt from Swiss-based impact investor BlueOrchard Finance. While in February this year, it had raised $3.9 million from Hinduja Finance and IntelleGrow.