Gurugram-based Aye Finance, which provides business loans to MSMEs, is looking to increase its active customer base to 95,000 customers and disburse Rs 800-900 crore by end of 2018.
Gurugram-based Aye Finance, which provides business loans to MSMEs (micro, small and medium enterprises), is looking to increase its active customer base to 95,000 and take its total disbursement to Rs 800-900 crore by end of 2018, Founder and Managing Director Sanjay Sharma said to FE Online.
The startup also announced raising Rs 72 crore in debt funding from Swiss-based impact investor, BlueOrchard Finance. The funds raised will be deployed to enhance its credit portfolio and reach out to more MSMEs, the company said in a statement.
“We are able to lend Rs 80-100 crore worth new loans every month. Our existing portfolio is of Rs 750 crore, which consists of around 70,000 active customers and has disbursed loans to up to 90,000 businesses so far,” Sharma told. “BlueOrchard, via the MIFA Technical Assistance Facility (TAF) has co-designed and co-financed a social impact study for our customers as well as a social performance study,” Sanjay said. MIFA TAF is the technical assistance arm of MIFA debt fund, which provides refinancing to Asian microfinance institutions.
Aye Finance uses technology to study a mix of business, supply chain and psychometric data to help it decide on extending credit to small businesses. Launched in 2014, the company broke even last year, and expects around 3% return on assets this year. In an earlier interaction with the Financial Express, Aye Finance had claimed to have grown at the compound annual growth rate of over 350% in the last three years.
“It is because our write-offs are very low apart from our lower cost of operations due to process automation that we have invested in the last two years,” Sharma added. Aye Finance is also investing in building its collection capability from loan defaulters. “While it is not a challenge for us but we want to make sure that we are capable of recovering dues from across 104 branches that we have,” Sharma said.
The startup is focusing on helping its customers with better understanding around managing accounts, marketing products, finding right geographies for their business etc., to keep them active in its loan books. “We will conduct programs for our customers to focus on certain key business dynamics for growth. For the same we have also designed a smartphone application,” Sharma said.
Aye Finance has raised $78.4 million in 11 funding rounds so far, as per deal activity tracker Crunchbase. It has 104 branches in 100 cities with a headcount of over 1,600 employees.