Aye Finance Bags Rs 212 Crore Deal with Goldman Sachs to Boost Micro Lending
Aye Finance Bags Rs 212 Crore Deal with Goldman Sachs to Boost Micro Lending NDTV Profit
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Aye Finance Secures Rs 212 Crore Securitisation Deal with Goldman Sachs
Introduction
Aye Finance, a fintech non-banking financial company specializing in loans for micro enterprises, has announced a successful securitization deal worth Rs 212 crore with Goldman Sachs (India) Finance Pvt Ltd. This transaction is a significant step towards Aye Finance’s goal of expanding its lending services to microenterprises across India.
Supporting Sustainable Development Goals
This partnership aligns with the Sustainable Development Goals (SDGs) set by the United Nations. By providing financial support to microenterprises, Aye Finance contributes to SDG 1: No Poverty, SDG 8: Decent Work and Economic Growth, and SDG 10: Reduced Inequalities.
Statement from Aye Finance CFO
Krishan Gopal, the CFO of Aye Finance, emphasized the company’s ability to cater to the credit needs of microenterprises through its business model. He stated, “Aye has emerged as a category leader transforming micro enterprise lending in India, having provided credit lines of over Rs 10,000 crores to 9 lakh grassroots businesses, and this deal will further accelerate our growth trajectory.”
Goldman Sachs’ Focus on Innovative Financing
Hitesh G, an executive director at FICC Credit Structuring at Goldman Sachs in India, highlighted the firm’s commitment to providing innovative debt financing instruments in India. This collaboration with Aye Finance demonstrates their dedication to supporting microenterprises and fostering economic development.
Financial Performance of Aye Finance
In June 2024, Aye Finance reported a threefold increase in profit to Rs 161 crore and a 67% rise in revenue to Rs 1,072 crore compared to the previous fiscal year. These impressive financial results reflect the company’s strong position in the market and its ability to meet the financial needs of microbusinesses.
Prior Funding and Support for Microbusinesses
In December 2023, Aye Finance secured Rs 330 crore in a Series F equity round. The company has implemented a robust system to provide financial support to microbusinesses, aiming to address the needs of this underserved sector. This aligns with SDG 9: Industry, Innovation and Infrastructure, which focuses on promoting inclusive and sustainable industrialization.
Conclusion
The securitization deal between Aye Finance and Goldman Sachs is a significant milestone in the financial inclusion of microenterprises in India. By supporting the growth and development of these businesses, both companies contribute to the achievement of the Sustainable Development Goals, fostering economic prosperity and reducing inequalities.
(With Inputs From PTI)
SDGs, Targets, and Indicators
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 1: No Poverty
- SDG 8: Decent Work and Economic Growth
- SDG 10: Reduced Inequalities
The article discusses Aye Finance’s efforts to expand its lending services to microenterprises in India. By providing loans to microenterprises, Aye Finance contributes to poverty reduction (SDG 1) by supporting the economic growth and financial inclusion of these businesses. Additionally, the company’s focus on microenterprise lending aligns with SDG 8, which aims to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. Lastly, Aye Finance’s mission to address the needs of underserved microbusinesses contributes to SDG 10, which seeks to reduce inequalities within and among countries.
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 1.4: By 2030, ensure that all men and women, in particular, the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services, including microfinance.
- SDG 8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all.
- SDG 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies, and practices and promoting appropriate legislation, policies, and action in this regard.
Based on the article, the specific targets that can be identified are SDG 1.4, which focuses on ensuring equal access to financial services, including microfinance, for the poor and vulnerable. SDG 8.10 emphasizes the need to strengthen domestic financial institutions to expand access to banking and financial services for all. Lastly, SDG 10.3 highlights the importance of reducing inequalities of outcome, including through appropriate legislation and policies.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Number of microenterprises receiving loans from Aye Finance
- Amount of loans provided to microenterprises
- Profit and revenue growth of Aye Finance
- Amount of financial support provided to microbusinesses
The article mentions that Aye Finance has provided credit lines of over Rs 10,000 crores to 9 lakh grassroots businesses. This indicates the number of microenterprises receiving loans and the amount of loans provided, which can be used as indicators to measure progress towards SDG 1.4 and SDG 8.10. The profit growth of Aye Finance to Rs 161 crore and the revenue growth to Rs 1,072 crore in the last financial year compared to fiscal 2023 can be used as indicators of the company’s financial performance and progress towards the targets. Additionally, the article mentions that Aye Finance has implemented a strong system to extend financial support to microbusinesses, indicating the amount of financial support provided, which is relevant to SDG 10.3.
4. Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 1: No Poverty | 1.4: By 2030, ensure that all men and women, in particular, the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services, including microfinance. | – Number of microenterprises receiving loans from Aye Finance – Amount of loans provided to microenterprises |
| SDG 8: Decent Work and Economic Growth | 8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all. | – Number of microenterprises receiving loans from Aye Finance – Amount of loans provided to microenterprises – Profit and revenue growth of Aye Finance |
| SDG 10: Reduced Inequalities | 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies, and practices and promoting appropriate legislation, policies, and action in this regard. | – Number of microenterprises receiving loans from Aye Finance – Amount of loans provided to microenterprises – Amount of financial support provided to microbusinesses |
Source: ndtvprofit.com
