This Google-backed MSME lender just crossed key milestone amid flattening growth in bank credit

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Updated: February 13, 2020 12:27 PM

Credit and Finance for MSMEs: According to the recent RBI data, growth in bank credit to micro and small enterprises (MSE) has remained contracted in the current FY so far.

Small business lender Aye Finance has raised 193 million dollars so far.

Credit and Finance for MSMEs: Digital lender Aye Finance has crossed the 2 lakh-micro enterprise milestone in disbursing loans worth more than Rs 2,900 crores since its inception in 2014, the company said on Tuesday. Aye Finance currently has an asset book of over Rs 1,600 crores. “Aye was incepted with a vision of delivering a nationwide social impact by facilitating the access of micro and small-scale enterprises to affordable and adequate credit solutions. By crossing the milestone of over 200,000 Indian MSMEs, we have certainly inched closer to realising the same vision.,” Sanjay Sharma, MD and Founder, Aye Finance told Financial Express Online.

The company has an industry-clusters approach to reach out to potential loan seekers based in a particular product cluster of a particular sector. Aye Finance is currently present in 18 states/union territories with 173 branches and employs more than 3,000 employees. Its FY19 disbursals stood at Rs 1,000 crores. For FY 20, “the disbursal will be worth Rs 1,600 crores out of which we have already disbursed Rs 1,336 crores,” said Sharma.

Aye Finance is backed by CapitalG (formerly Google Capital) along with SAIF Partners, Falcon Edge, Accion, LGT Capital and MAJ Invest. The company had disbursed Rs 750 crore to around 90,000 businesses and had 104 branches, Sharma had said in a November 2018 interaction. The total funding raised by Aye Finance so far stood at $193 million with the latest round of $20 million in January this year raised by A91 Partners,  as per deals tracker Crunchbase.

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Access to affordable credit has always been a key concern for MSMEs as banks have reportedly shied away from lending to small businesses due to inadequate credit history, poor bookkeeping and financial planning etc. According to the recent RBI data, growth in bank credit to micro and small enterprises (MSE) has remained contracted in the current FY so far.  Since April when the credit growth had shrunk at minus 0.1 per cent, the trend has remained till December during which the contraction was 0.5 per cent. The December bank credit to MSEs was Rs 10.61 lakh crore — 5.7 per cent up from Rs 10.04 lakh crore in the year-ago period.

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