Yes Bank teams up with Avigo Capital for SME funding

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Mumbai, Jan 18: New generation Yes Bank has joined hands with private equity player Avigo Capital Partners to meet the growing funding needs of the small and medium enterprises (SMEs). Avigo Capital Partners, which has set up a $100 million fund has raised closed to $40 million by end-December and would be raising the balance amount by the end the current fiscal.

Varun Tuli, president-business banking, Yes Bank, said, “Clients with high debt-equity ratio seek funding from private equity players. However, there are not many private equity firms in the country meeting the requirements of the SME segment.” Prior to joining Yes Bank, Tuli was the executive director and country head at Avigo Capital Partners, where he managed the deal sourcing and execution process for the Avigo SME Fund.

Currently, private equity players like Aeurous, Blue River, BTS India, Small Industries Development Bank of India (Sidbi), Canara Bank are the few players catering to the funding needs of the SME segment. IL&FS, which has traditionally been a stronger player in this segment has graduated from funding to small enterprises to meeting the finance needs of large corporates.

Yes Bank had earlier inked an agreement with Sidbi to provide credit and other financial products to the small and medium enterprises sector, under a new co-brand called ‘Yes SIDBI’.

The bank would be looking at more such tie-ups with private equity funds to meet the credit requirements of the SME segment. “While we will continue to have tie-ups, we have to see that those partnerships add business value too,” added Tuli.