New Delhi, July 26 (KNN) CapitalG backed fintech lender, Aye Finance, has raised USD 10 Million in debt funding from leading global impact investment managers- Triple Jump BV and MicroVest Funds, through the issuance of Non-Convertible Debentures, Aye Finance said in a release.

With the recent funds raised, Aye is gearing up to bolster its lending portfolio and offer affordable business loans to a larger number of microenterprises in India. This transaction was syndicated and executed by Northern Arc Capital.

“Micro enterprises are at the bottom of the MSME hierarchy of businesses and Aye’s mission is linked to raising this financially excluded sector and bringing it into the folds of organized finance.  The MSME lender has designed its acquisition and credit assessment processes that mirrors the comfort of the micro entrepreneur, and is fast emerging as the leader in micro lending space having disbursed over INR 800 Crores to over 65,000 customers,” the release added.

Sanjay Sharma, MD and Founder of Aye Finance said, “At Aye we use various data science methods which are layered over the traditional metrics of lending. These combined methods help us focus on the structural challenges of lending to micro businesses, who often do not maintain formal books of accounts, while reducing the possibility of credit losses in our portfolio. This has allowed us to cater to the credit needs of this underserved albeit creditworthy sector. And the confidence global investors like Triple Jump and MicroVest instil in us by offering us funds for onlending further strengthens our resolve to transform micro enterprise lending in India”.

 Triple Jump is an impact-focused investment manager that provides meaningful and responsible investment opportunities in developing countries “Aye Finance has found an innovative approach to serve the so-called missing middle. These micro and small sized businesses have outgrown microfinance and are often overlooked by banks. We are happy to support Aye Finance in its growth” said Freek Kortekaas, Regional Manager Asia, Triple Jump.

“MicroVest’s mission closely aligns with Aye Finance’s commitment to empowering entrepreneurs, and we’re excited to partner with them to achieve this goal. We are confident in Aye Finance’s management team’s ability to continue scaling the organization, which will enable the firm to serve even more small businesses in India,” said MicroVest’s Chief Investment Officer, John Beckham. He added, “This investment in Aye Finance also allows MicroVest to diversify its exposure in India’s rapidly evolving financial sector.”

Dr Kshama Fernandes, Chief Executive Officer of Northern Arc Capital,  which was the transaction advisor for this fund raise said, ‘’It was a complex transaction as it was executed immediately after the new regulations governing FPI investments in corporate bonds were announced by the RBI and SEBI earlier this year. As a result, the deal required careful planning and structuring to ensure that the regulatory plus commercial requirements of both investors were met. Aye also benefitted through a larger quantum of the issuance. Northern Arc Capital is delighted to have played a key part in this deal and remains committed to raising debt for its clients from reputed investors.’’

Last month Aye Finance became the first finance company to receive equity investment from CapitalG (formerly Google Capital). It raised $21.5 Million in Series C equity from the venture capital fund owned by Alphabet Inc. as well as its exiting investors SAIF Partners and LGT.

Since its inception in 2014 Aye Finance has been successfully disrupting the status quo in MSME lending while setting new standards in building a quality loans portfolio in an inclusive manner.