Microlending platform Aye Finance has successfully raised Rs 250 crore ($30 million) in debt funding from FMO, the Dutch entrepreneurial development bank. This marks the second significant funding round for the Gurugram-based company in the past six months.
The fresh capital infusion will be strategically utilized to further Aye Finance’s mission of financial inclusion. The company aims to extend its lending services to underserved micro, small, and medium enterprises (MSMEs) across India, enhancing their access to crucial financial resources.
In December, Aye Finance secured $37 million in a Series F funding round. This round was led by British International Investment with participation from the Waterfield Fund and existing investor A91 Partners. Notably, this equity funding came after a three-year gap, alongside raising Rs 1,043 crore ($125 million) in convertible debentures during FY23.
Aye Finance specializes in providing financial services to micro and small businesses, operating over 398 branches across 22 states in India. The company primarily caters to the manufacturing, trading, and service sectors.
The firm offers three core products — quasi mortgage loans, hypothetical loans, and add-on loans — with loan amounts ranging from Rs 50,000 to Rs 1,000,000. To date, Aye Finance has disbursed over Rs 7,600 crore ($915 million) in credit to more than 576,000 businesses, boasting a 60% customer retention rate.
Financially, Aye Finance has shown robust growth. Its revenue from operations surged 44.5% to Rs 623 crore during FY23, yielding a profit of Rs 54 crore. The company has claimed an even more impressive performance in FY24, with profits tripling to Rs 161 crore and revenue increasing by 67% to Rs 1,072 crore.
Aye Finance concluded FY24 with assets under management (AUM) of Rs 4,500 crore and a gross non-performing asset (NPA) ratio of 1.21%.
The company faces competition from several non-banking financial companies (NBFCs) such as Indifi, Axio (formerly Capital Float), Lendingkart, Flexiloans, and others, each striving to carve out a share in the growing MSME lending market.
