Kinara Capital has secured USD $10 million (INR 74 crores) from IndusInd Bank with a 100% guaranty from the U.S. International Development Finance Corporation (DFC). This fundraise is part of a debt and equity round of INR 100 crores, with equity contribution coming from Kinara’s existing investors – Gaja Capital, GAWA Capital, Michael & Susan Dell Foundation (MSDF) and Patamar Capital.
Kinara Capital will be using the funds for expansion of MSMEs financial inclusion across manufacturing, trading and services sectors in India. So far it has disbursed more than Rs 2000 crore across 56,000 plus collateral free small business loans.
The $10 million investment will be deployed over five years from IndusInd Bank’s impact investing division with full backing from DFC which is a part of the US Federal Government and an emerging markets impact leader.
Hardika Shah, Founder & CEO, Kinara Capital said, “Our partnership with IndusInd and DFC underscores our shared commitment to ease the credit hurdle faced by most small business entrepreneurs in India.”
She adds, “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.”
“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.”
Loren Rodwin, Managing Director, Social Enterprise Finance Team, Office of Development Credit at U.S. International Development Finance Corporation (DFC) said, “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.”
Kinara Capital provides collateral free business loans from Rs 1 lakh to Rs 30 lakhs with both digital and doorstep customer service options. It relies on AI/ML based data driven automated credit decisioning and about 90% of the customer base is new to credit.