Aye Finance has completed a pilot programme using Generative AI technology to enable image-based underwriting for trading businesses. The initiative aims to enhance access to formal credit for small enterprises operating in Tier 2 cities and beyond.
The cutting-edge solution, developed in-house, leverages Generative AI and Machine Learning (ML) models to estimate business sales directly from images of store premises and other related parameters. By enabling data-driven credit evaluation through store images, the model significantly reduces the “cost-to-serve” for micro-enterprises and improves operational efficiency in lending processes.
Aye Finance has been actively investing in data science capabilities. The company, which received equity investment from Google Capital in 2018, established its Data Science and Artificial Intelligence Unit in 2019 and has since deployed several customised ML models across different stages of the customer lifecycle. These initiatives aim to optimise unit economics and extend credit access to a broader base of grassroots businesses.
The newly developed system focuses on a critical segment of trading businesses by converting unstructured data, specifically store images, into actionable financial insights. Built on Aye Finance’s extensive internal datasets, the solution has been rigorously tested for consistency and reliability. By using a Multimodal Large Language Model (MLLM) integrated with proprietary ML models, the system can estimate the monthly sales of stores such as garment shops or grocery outlets using store images as input.
This innovation reduces reliance on subjective judgement during underwriting and enables a more standardised and fair process for income estimation. Automating these complex components allows Aye Finance to process loan applications with greater speed and consistency, while also creating opportunities to expand the methodology to additional sectors beyond trading businesses.
Commenting on the development, Sanjay Sharma, Managing Director, Aye Finance Ltd., said, “Our leadership in lending to the underserved segment of micro MSMEs has been rooted in superior operational efficiency. This GenAI integration builds on our established efficiency. By automating income estimation through Generative AI, we will substantially reduce manual fieldwork with an accelerated, data-driven system that increases both the speed and the reliability of our credit decisions. Aye has demonstrated that lending to micro-enterprise business is a rewarding opportunity, when illuminated by our advanced, technology supported lens.”
Across India, nearly 60 million micro-entrepreneurs in Tier 2 cities and beyond face barriers to formal credit due to the absence of accounting records and traditional financial documentation. As a Middle-Layer Non-Banking Financial Company (NBFC-ML), Aye Finance has been addressing these challenges since 2014 by offering tailored working capital and expansion loans typically secured against working assets or property. The company recently completed a successful IPO, raising Rs 1,010 crore and strengthening its capital base for future growth.
Send news announcements/press releases to:
editor@thefoundermedia.com
