Aye Finance raises $15 million from Swiss impact investor BlueOrchard

Aye Finance, the Gurugram-headquartered NBFC (non-banking financial company) that lends to micro-enterprises, has raised $15 million of debt funding from Switzerland-based impact investor BlueOrchard.

The company will use the fresh funds to extend its affordable and customised credit solutions, an official statement said.

The fresh funding comes a little over a month after it raised $17.4 million from Dutch development finance institution FMO via a non-convertible debenture issue. 

With this transaction, Aye Finance, which calls itself a technology-driven lender, has so far raised $253 million in equity and debt capital.

In the current year, Aye has raised over Rs 1,140 crore in debt and equity from investors including Google parent Alphabet’s investment vehicle CapitalG, and other investors such as Falcon Edge, HDFC, ICICI and DCB Bank, the statement added.

“This is the sixth round of funds we have received from BlueOrchard and I believe this demonstrates their comfort with us and commitment to our business,” Sanjay Sharma, MD and founder of Aye Finance, said.

The company continues to raise significant capital at a time when the overall NBFC sector is facing a cash crunch. However, it faced higher finance costs in FY19.

Founded in 2014 by Sharma and Vikram Jaitley, Aye Finance offers business loans to micro-enterprises and claims to have 173 branches and employ 2,900 staffers.

The company claims to have provided Rs 2,700 crore worth of credit to close to two lakh businesses. It has an active customer base of over 1.3 lakh and an AUM (assets under management) of Rs 1500 crore, according to the company. Aye has expanded its presence to 173 cities across 18 states.

Last month, the lender posted a muted 9% growth in net profits in FY19 at Rs 25 crore despite a doubling of income to Rs 217 crore on account of higher provisioning for stressed assets. Gross NPAs (non-performing assets) rose to Rs 18.6 crore from Rs 7.7 crore, while net NPAs fell to Rs 4.11 crore from Rs 4.99 crore.

BlueOrchard, which first invested in the company in May 2017, has taken a total exposure of Rs 290 crore in the ministry of micro, small and medium enterprises lender.

BlueOrchard was founded in 2001, by the initiative of the UN, as the world’s first commercial manager of microfinance debt investments. It offers a slew of investment solutions to investors including credit, private equity and sustainable infrastructure, as well as debt and equity financing to institutions in emerging and frontier markets. With offices in four continents, BlueOrchard has invested, to date, more than $5 billion across 80 markets.

“India is an important market for BlueOrchard -- one that we have been actively investing in for almost 20 years. This additional funding is a testament to our conviction in the company’s mission to bridge the gap between loans offered by MFIs and those available from commercial banks, offering MSMEs across India access to attractive credit solutions,” Normunds Mizis, chief credit officer at BlueOrchard, said.