Aye Finance goes Dutch, raises Rs 125 crore from Europe Bank for Indian biz-women

Aye Finance goes Dutch, raises Rs 125 crore from Europe Bank for Indian biz-women

To encourage Indian women entrepreneurs, new-age fintech startup Aye Finance raised Rs 125 crore on Wednesday from Dutch entrepreneurial development bank FMO by issuing non-convertible debentures. The Gurgaon-based company specialises in providing loans to small and medium business enterprises in India and this fundraising venture is expected to help expand its credit providing capabilities for enterprises led by women entrepreneurs.

The fundraising was driven and executed by Northern Arc Capital, a Chennai-based NBFC which had invested in Aye Finance, in January 2019. Previously, CapitalG, the growth equity investment fund of Alphabet Inc, Google’s parent company, had invested a sum of INR 115 crore in Aye Finance in 2018-19. With the funds from FMO, this brings its total funding to over INR 2,200 crore. According to Linda Broekhuizen, Chief Investment Officer at FMO, Aye Finance will on-lend the debentures issued by it to micro entrepreneurs, half of whom will be women entrepreneurs in the area of underbanked clients.

The sixth Economic Census published by the Ministry of Statistics and Programme Implementation in 2018 stated that men still constitute 86 percent of Indian entrepreneurship. As a result, women entrepreneurs in India continue to face an uphill climb, with many venture capitalists remaining apprehensive about investing in a woman-led business. This was also evidenced by Sanjay Sharma, MD and Founder of Aye Finance, who stated that women co-applicants constituted the recipients of over 95 percent of the loans provided by the company.

Hence, the deal with FMO will help Aye Finance set up a gender finance programme that enables women-driven micro enterprises in India to bring about a more impactful transformation of the economy. To this end, the company had added the states of Bihar, Jharkhand, Gujarat, and Maharashtra to its branch network this year, owing to the prevalence of women entrepreneurs in such regions. The funds from FMO will not only help it support the growth of women-led enterprises in these states, but also in 14 other states where it already has an established presence.

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