Aye Finance raised $10 million debt from responsAbility

Aye Finance Pvt ltd happens to be a small business lender. It has recently raised $10 million debt from responsAbility Investments AG which is a Swiss impact investor, as reported by a senior executive.

Sanjay Sharma, managing director, in a phone interview, said:

“We plan to use the funds raised for growth, to lend more and build a profitable loan book, and are seeing significant demand despite the liquidity crisis.”

Aye Finance as a business lender is known to lend around Rs 1 to 2 lakhs to businesses with a turnover of Rs 10 to 30 lakhs a year. So far, the company has managed to raise about $70 million in equity. Their last raising was around $36 million in a Series D round from US-based Falcon Edge Capital, venture capital firm SAIF Partners and Alphabet’s investment arm Capital G.

In the current round, the company has managed to raise around $5 million from responsAbility through non-convertible debentures and the balance $5 million has been issued from a securitization pool raised by responsibility, which was arranged by JPMorgan.

Key investors participating in the transaction include the Overseas Private Investment Corp, Alecta, a European Pension fund, and a US government agency focussing on development finance. Despite the slow-down in the non-bank lending sector because of liquidity crunch, Aye claims that its growth has been not been affected in any way.

Sharma commented:

“Our growth has not slowed down at all because our borrowers’ funding requirement is less, the payback period is relatively shorter and we have a good track record.

Currently, Aye is disbursing about $100 crore a month and also has a loan book of $1100 crore. The company is planning to double its disbursements and expects to have a loan book of about $1700 crore by the end of this year.

Sharma said:

“The coming months are peak season for micro-enterprises because of festive demand, we expect a significant uptick and to lend about $200 crore a month by the end of this year.”

In the last week, two small business lenders have raised equity capital whole others are still looking for funds.

Aye has managed to raise around $1200 crore of debt so far, from global impact investment managers TripleJump BV and MicroVest Funds as well as responsibility and Northern Arc capital, from whom it raised about $10 million in February this year.