Bangalore: Kinara Capital, a Bangalore based social enterprise committed to bridging the debt gap in India by financing micro, small, and medium enterprises (MSMEs), announced it has received an equity investment from the Michael & Susan Dell Foundation. This investment will support Kinara’s efforts to expand their operations in India and adds a new facet to the Michael & Susan Dell Foundation’s existing catalytic portfolio of initiatives that helps provide financial services to urban poor families in India. The Dell family foundation will hold a minority equity stake in the company, and Mr. Satyam Darmora, Portfolio Lead, Family Economic Stability will join the Board of Directors. The Family Economic Stability portfolio of Michael & Susan Dell Foundation includes more than 25 microfinance and skill training institutions.
Kinara Capital is addressing the INR 1 Trillion* debt gap between microfinance and commercial capital by providing collateral free loans in the range of Rs.50,000 to Rs.10,00,000 for asset finance and working capital to MSMEs. Kinara has taken an innovative approach to managing risk through strategies such as psychometric testing to understand the MSMEs’ “willingness to pay,” a cash flow driven risk-assessment, and funding across the supply-chain to create checks-and-balances. Kinara also provides a receivables financing product that is typically inaccessible for micro and small businesses. Kinara aims to create 100,000 net new jobs and impact 1 million lives in five years in India.
Ms. Hardika Shah, CEO and Founder of Kinara Capital, said, “We at Kinara Capital are proud to bring the Michael & Susan Dell Foundation as an investor and to have Mr. Satyam Darmora join our Board. Kinara recognizes that providing the right financing solutions to MSMEs has the potential for significant economic and social impact. We are continuously innovating on how to meet the financial needs of these entrepreneurs who are often excluded by the traditional banking system. This recognition and support from the foundation will surge Kinara’s efforts to expand its operations to new geographies and deploy field agent technology to increase operational efficiency and improve customer service.”
Mr. Debasish Mitter, Country Director, India, Michael & Susan Dell Foundation said, “Michael & Susan Dell Foundation is pleased to support Kinara Capital, a company dedicated to bridging the debt gap for MSMEs. Kinara Capital and its CEO Ms. Hardika Shah caught our attention because of their innovative approach towards solving the sizeable lending issues in India for the micro, small, and medium enterprises (MSMEs) that contribute to more than 20 percent of the nation’s GDP.”
Mr. Satyam Darmora, Portfolio Lead, Family Economic Stability, India, Michael & Susan Dell Foundation said, “One wage earner per family typically supports a household of four in India. The economic growth of MSMEs amplifies the social impact on families and an increase in income can drive improvements in children’s education and wellbeing. Through this investment we aim to meet the debt capital needs of urban low-income micro-entrepreneurs to help them grow and scale their businesses, improve their livelihoods in measurable ways and meet our mission of transforming the lives of children living in urban poverty. I look forward to working closely with Kinara’s dynamic team.”
Since its launch in 2011, Kinara Capital has financed over 1,200 loans with a 99.9% recovery rate. Kinara funds a wide range of MSMEs; over 80% of their portfolio is in urban areas and spans a variety of small scale manufacturing businesses such as auto parts, electrical components, kitchen appliances, artisan products, eco-friendly products, agri-equipment, packaging products, and more.
Kinara’s customer is often a first generation entrepreneur with basic education, has 7 to10 years of field experience with a typical business turnover of Rs. 3-5 Lakh per month. By Kinara providing a financially inclusive solution, there is an immediate social and economic impact of income increase that improves the livelihood and well-being of the MSME business owner, its employees and their families.