Aye Finance Secures Rs 250 Crore Debt Funding from FMO

Aye Finance, a leading microlending platform, has secured a significant debt financing of Rs 250 crore (approximately $30 million) from FMO, the Netherlands-based entrepreneurial development bank. This latest infusion of capital marks Aye Finance’s second funding success within the past six months.

Funding Fuels Financial Inclusion for Underserved MSMEs

The company plans to leverage the acquired funds to propel its mission of financial inclusion. Aye Finance will utilize the capital to expand its loan disbursement reach, empowering underserved micro, small, and medium enterprises (MSMEs) across India.

Building on a Strong Financial Performance

This debt financing follows Aye Finance’s successful Series F equity round in December 2023. Led by British International Investment alongside Waterfield Fund and existing investor A91 Partners, the round raised $37 million. Notably, in the previous fiscal year (FY23), the company secured Rs 1,043 crore ($125 million) through convertible debentures, demonstrating its diversified funding strategy.

Financial Services Tailored for Micro and Small Businesses

Aye Finance caters to the financial needs of micro and small businesses across the country. The company operates an extensive network of over 398 branches in 22 Indian states, with a focus on serving businesses in the manufacturing, trading, and service sectors.

Diverse Loan Products Drive Growth

Aye Finance offers a comprehensive suite of loan products tailored to the specific requirements of its customers. These products include quasi mortgage loans, hypothetical loans, and add-on loans, ranging from Rs 50,000 to Rs 1,000,000. The company has achieved impressive growth, disbursing over Rs 7,600 crore ($915 million) in credit to more than 576,000 businesses to date. Notably, Aye Finance boasts a strong customer retention rate of 60%.

Financial Strength and Continued Growth Trajectory

Aye Finance has exhibited robust financial performance. The company’s revenue from operations surged by 44.5% to Rs 623 crore in FY23, coupled with a healthy profit of Rs 54 crore. According to the company, its profitability has grown significantly in FY24, with profits tripling to Rs 161 crore, while revenue climbed by 67% to Rs 1,072 crore. Aye Finance ended FY24 with a commendable Assets Under Management (AUM) of Rs 4,500 crore and a low gross NPA ratio of 1.21%.

Navigating a Competitive Landscape

Aye Finance operates in a dynamic financial services landscape with several competitors, including established NBFCs like Indifi, Axio (formerly Capital Float), Lendingkart, and Flexiloans. The company’s focus on microlending, diverse product portfolio, and commitment to financial inclusion position it for continued success in empowering underserved MSMEs across India.