Mumbai: New Delhi-based Aye Finance Pvt. Ltd, a lender to small businesses, on Thursday said it has raised 20 crore from Accion International, a global non-profit that supports microfinance institutions and venture capital firm SAIF Partners. The company had raised $1 million from the dame investors in February.

Aye Finance that was founded in 2014 by Sanjay Sharma and Vikram Jetley is looking to use the funds to help micro and small enterprises (MSMEs) meet working capital and capex needs.

Aye Finance’s innovative ‘industry insight’ approach has helped the lender find, assess, and evaluate prospective borrowers. Their creative approach has helped India’s micro and small businesses obtain the financing that they need, and has unlocked credit for entrepreneurs who are typically locked out of the financial system," said Vishal Sood, managing director with SAIF partners.

India’s MSME sector represents nearly 58 million businesses, creates 150 million jobs, and accounts for 45% of the country’s industrial output, according to a statement issued by the company. The funding gap for the sector is worth 5 trillion, shutting out many entrepreneurs and restricting them from expanding businesses.

The company assess creditworthiness, evaluates the reputation of lenders and provides loans between 50,000 to 25 lakh. Aye Finance has expanded to 16 cities across northern India and plans to continue expanding in the coming year.

Other start-ups in the space of lending and allied services include creditvidya (InfoCredit Services Pvt. Ltd ) and Credit Sudhaar Services Pvt Ltd. This year, Lendingkart Technologies Pvt. Ltd raised $10 million from Saama Capital and Chennai-based CreditMantri Finserv Pvt. Ltd raised its first (Series A) round of funding worth $2.5 million from IDG Ventures India, Elevar Equity and Accion Venture Lab.

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