Accion & SAIF Partners Co-Invest In MSME Lender Aye Finance

The dearth of capital investment in India’s MSME sector has long fielded an unorganized sector of informal moneylenders charging exorbitant interest rates.
Looking to formalize the lending process and offering secured loans to MSMEs is Aye Finance, which has raised $1 million in seed funding led by SAIF Partners and Accion.
The firm looks to address the ‘missing middle’ – providing capital to MSMEs that are too small for commercial finance and too large for traditional microfinance.
Aye Finance provides loans as low as $1,000 at market rates, and serves borrowers from industries such as shoemaking, garments, textiles, leather and auto components.
The debt gap for MSMEs in India is estimated to be $198 billion, and is increasing at 11 percent per year. The 40 million micro-businesses in India today constitute the fastest growing segment in the industrial sector.

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