Why this MSME lending startup believes it can build a Rs 1,000Cr business by lending to micro-enterprises

Gurugram-based MSME lending startup Aye Finance enables financial inclusion for micro-enterprises through tech-based processes to build credit insights. It doubled its revenue to Rs 410 crore this year.

Micro, Small and Medium Enterprises (MSME) form a large portion of the industrial output and employment in India. According to FICCI, about 60 million MSMEs employ over 11 crore people that deliver over 45 percent of the country’s industrial output by value.  Despite being a critical sector to the economic growth, MSMEs and micro-enterprises, in particular, continue to struggle. The biggest pain point continues to be a lack of adequate and timely credit and efficient underwriting systems that supply credit to micro-enterprises.  Legacy credit systems do not have significant data on their credit histories, and traditional banking and financial institutions see servicing micro-enterprises’ credit requirements as expensive because of the small ticket size of the loans.