B2B Payments

Aye Finance Raises $14M To Bolster SMB Loan Portfolio

India-based Aye Finance has raised INR 1 billion (more than $14 million) in debt funding from BlueOrchard, reports said Thursday (Dec. 26).

Aye Finance said it will deploy the investment to broaden its small to medium-sized business (SMB) loan portfolio across India. The debt funding is backed by CapitalG, Alphabet’s growth equity investment fund, as well as others, according to IBS Intelligence reports.

The investment is the third round of debt funding raised by Aye Finance in the last quarter, with the company having raised about $16.8 million from Netherlands-based development bank FMO last month.

In August, the company announced that DCB Bank had provided about $8 million in debt funding, which was also deployed to expand Aye’s SMB loan portfolio.

“This is the sixth round of funds we have received from BlueOrchard, and I believe this demonstrates their comfort with and commitment to our business,” said Aye Finance Managing Director Sanjay Sharma. “Lending to micro-enterprises has been a less-traveled path for banks and financial companies and hence it is satisfying to have established an innovative paradigm of our lending approach. Aye team has demonstrated the robustness of our cluster-based lending approach has enabled the inclusion of close to 200,000 micro-enterprises using this approach.”

Sharma told reporters the company will expand its micro- and SMB loan book with a focus on connecting under-served SMBs to affordable financing.

India is an important market for BlueOrchard and one that we have been actively investing in for almost 20 years,” added BlueOrchard Chief Credit Officer Normunds Mizis. “We have been working with Aye Finance since 2017. This additional funding is testament to our conviction in the company’s mission to bridge the gap between loans offered by MFIs [micro finance institutions] and those available from commercial banks, offering [micro-SMBs] across India access to attractive credit solutions.”



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.