New funding will be for MSMEs in manufacturing, trading and services
Pune headquartered IndusInd Bank with a 100% guaranty from the U.S. International Development Finance Corporation (DFC), has provided US$10 million to Kinara Capital for the expansion of MSME financial inclusion across manufacturing, trading, and services sectors in India.
This is a part of a debt and equity round of Rs.100 crores, with equity contribution coming from Kinara’s existing investors – Mumbai’s Gaja Capital, Spain’s GAWA Capital and the United States’ Michael & Susan Dell Foundation (MSDF) as well as Patamar Capital.
Kinara Capital said the investment will be utilized towards the expansion of MSME financial inclusion across manufacturing, trading, and services sectors in India. Kinara Capital is at the forefront of driving financial inclusion in India and has disbursed Rs.2,000 crores across 56,000+ collateral-free small business loans.
The special US$10 million investment for onward lending to small business entrepreneurs will be deployed over five years from IndusInd Bank’s Impact Investing division with full backing from DFC, part of the US federal government and an emerging markets impact leader, Kinara Capital said on 22 Feb 2021.
This three-way partnership between Kinara Capital, IndusInd Bank and DFC unites the organizations’ shared goals to promote entrepreneurship, financial inclusion and job creation.
“Our partnership with IndusInd and DFC underscores our shared commitment to ease the credit hurdle faced by most small business entrepreneurs in India,” said Hardika Shah, Founder & CEO, Kinara Capital.
“MSMEs galvanize India’s economy with income generation and job creation and there is an ever increasing demand for financing for businesses to rebuild and grow this year. This investment from IndusInd Bank and DFC will accelerate financial inclusion of small businesses, thereby invigorating local economies,” said Shah.
“We are glad to have associated with DFC to support a strong impact creating entity, Kinara Capital, in their growth trajectory,” said Roopa Satish, Head, Corporate & Investment Banking, CSR & Sustainable Banking, IndusInd Bank.
“The guaranty from DFC eliminates foreign exchange rate fluctuation risk from the balance sheet of Kinara and it has become an important tool to mobilize debt funding for impact space companies,” added Satish.
“We hold the organizations that we fund to a very high standard and Kinara Capital is a role model when it comes to last-mile delivery,” said Loren Rodwin, Managing Director, Social Enterprise Finance Team, Office of Development Credit at U.S. International Development Finance Corporation (DFC).
“Commitment towards financial inclusion from Kinara Capital has made it possible for us to collaboratively help India’s small business entrepreneurs. We are motivated by the high potential and the high prospects of the diverse MSME sector in India and proud to partner with both IndusInd and Kinara Capital,” said Rodwin.
Kinara Capital brings a wide variety of MSMEs into the financial inclusion fold, such as small-scale manufacturing industries to general retail shops to service businesses, by providing collateral-free business loans in the range of Rs.1 lakh to Rs.30 lakhs.
In offering both digital and doorstep customer service options, MSMEs appreciate the convenience of Kinara’s fast 24-hour direct disbursements and flexible payment options on 400+ platforms, such as Google Pay.
Artificial Intelligence and Machine Learning (AI/ML) based data-driven automated credit decisioning enables Kinara to lend confidently without relying on property collateral or credit scores for risk assessment. Thus, about 90% of Kinara’s customer base is new to credit, receiving its first-ever business loan from the company.
The social impact of Kinara’s financial inclusion work to date has led to an incremental income generation of INR 700+ crores for small business entrepreneurs and led to more than 250,000 jobs created or sustained across 90+ urban, peri-urban and rural locations in India.
Kinara Capital is a socially responsible fintech non-banking financial company (NBFC) propelling the financial inclusion of small business entrepreneurs with fast & flexible collateral-free business loans. The company boasts a women-majority management team and is globally recognized for its innovations.
The IFC/World Bank named Kinara Capital as ‘Bank of the Year-Asia’ 2019 and Financial Times ranked it among the Top 100 High-Growth Companies in Asia-Pacific. Headquartered in Bangalore, the company operates 110 branches in 90+ cities in India. Kinara Capital is recognized as a Systemically Important NBFC by the Reserve Bank of India (RBI) and is a debt listed entity on the Bombay Stock Exchange (BSE). Click here for more information kinaracapital.com and follow us on Twitter @KinaraCapital
IndusInd Bank, which commenced operations in 1994, caters to the needs of both consumer and corporate customers. Its technology platform supports multi-channel delivery capabilities. As on 30 Sept 2020, IndusInd Bank has 1,910 Branches/Banking Outlet and 2,785 ATMs spread across 751 geographical locations of the country. The Bank also has representative offices in London, Dubai and Abu Dhabi. #banking #investment #funds #startup #fintech /fiinews.com
