Aye Finance Secures INR 250 Crore Debt Funding to Boost MSME Lending

Lending tech startup Aye Finance has secured debt funding of INR 250 crore (approximately $30 million) from the Dutch entrepreneurial development bank FMO. According to a statement from the startup, this new capital will be utilized to provide loans to underserved micro, small, and medium enterprises (MSMEs) across India.

Founded in 2014 by Sanjay Sharma and Vikram Jetley, Aye Finance offers affordable business loans to micro enterprises in India. The company employs cluster-based credit assessments and AI algorithms to evaluate risk in the absence of traditional business documentation. To date, it claims to have disbursed loans totaling over INR 10,000 crore to more than 867,000 borrowers.

Krishnan Gopal, Aye Finance's chief financial officer, remarked that this latest funding from FMO would be crucial in accelerating their lending efforts and supporting grassroots businesses, which are essential to the Indian economy.

This funding comes about three months after Aye Finance received INR 137 crore in debt funding from the German impact investment and portfolio management firm Invest in Visions in March. In December of the previous year, the startup raised INR 310 crore in a Series F funding round led by the UK’s British International Investment .

In total, Aye Finance has raised over $380 million to date. The startup reported a threefold increase in net profit year-on-year to INR 161 crore in the financial year 2023-24 (FY24), with revenue from operations rising by 67% to INR 1,072 crore.

Aye Finance operates in the rapidly expanding Indian fintech market, projected to reach $2.1 trillion by 2030. According to an analysis by Inc42, the lending tech market alone is expected to become a $1.3 trillion opportunity by the end of the decade.