The Netherlands-headquartered Triodos Bank, a leading sustainable bank, has subscribed to the ₹44 crore NCD issue of Gurgaon-based Aye Finance, which lends to micro and small enterprises.

Six-year tenor

The NCDs have a six-year tenor and provide long-term financing for Aye Finance, which will use the money to increase its asset book and for its expansion plans. IFMR Capital facilitated the transaction.

Triodos Investment Management, the asset management arm of the bank and a global impact investment manager, subscribed to the NCDs on behalf of the bank.

This is the second foreign investment deal facilitated by IFMR Capital for Aye Finance, after a ₹80-crore debt investment by impact investment manager Blue Orchard in May, according to an IFMR Capital press release.

Aye Finance has 72 branches in 10 States in the North and the South. As of March, it had assets under management of ₹130 crore and targets ₹430 crore in AUM for FY18.

The release quoted Kshama Fernandes, Chief Executive Officer, IFMR Capital, as saying that the transaction shows the strong quality and growth prospects of small businesses in India.

Customised products

Sanjay Sharma, Co-founder and Managing Director, Aye Finance, said the company offered customised and innovative financial products for micro-enterprises. In the last three years, the company had impacted an ecosystem of over one lakh families through business loans.

Aditya Mohan, Investment Officer, Triodos Investment Management, was quoted as saying that Aye Finance was a natural partner for Triodos in facilitating job creation and supporting small-scale entrepreneurs.

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