Aye Finance raises ₹310 crore from British International Investment, others

Micro-lending platform Aye Finance on Wednesday announced a ₹310 crore fundraise in a round led by British International Investment (BII). The fundraising, which also saw participation from Waterfield Fund of Funds and existing shareholder A91 Partners, takes the overall quantum of money raised by the 2014-incorporated Aye Finance to ₹1,000 crore.

BII's Director Financial Services Gaurav Malhotra said only 11% of the micro enterprises, who constitute a part of the overall MSME universe of 64 million have access to formal credit and the infusion is an attempt to bridge the gap.

"Our investment in Aye Finance underscores our commitment to back companies that have a strong development impact philosophy and promote financial inclusion for India’s underserved groups,” Malhotra said in a statement.

The small business-focused lender provides financial services to micro and small businesses and has over 398 branches operational in 22 states across India, primarily dealing in manufacturing, trading, and service groups.

Primarily focused on serving micro-enterprises, the company has disbursed ₹8,000 crore in loans till now and claimed to have gotten 7 lakh unorganised businesses into the formal lending ecosystem.

In the first half of 2023–24 ended September, the company's net profit stood at ₹80 crore, while the assets under management were ₹3,600 crore.

"We believe there is immense potential in lending to underserved microenterprises, and the fresh capital will provide a strong fillip to our compounding story," said Sanjay Sharma, Co-founder, Managing Director and Chief Executive Officer of Aye Finance.

Sharma also added that a large part of the funds raised would go towards aggressively growing its branches and expanding its team.

The firm is also mulling over entering the public markets in FY26.