Michael & Susan Dell Foundation and Unitus Impact Fund today announced an increase in their stake in Kinara Capital, in a new round of equity investment led by Shriram City Union Finance Ltd. The fastest growing MSME focused non-banking finance company, Kinara Capital has also signed a multi-year debt arrangement with Shriram City Union Finance Ltd. (SCUF), one of India's premier financial services company. Ensuing the funding, Subhasri Sriram, CFO & Executive Director of SCUF has joined Kinara Capital’s Board of Directors. Geoff Woolley, Managing Partner of Unitus Impact and Satyam Darmora representing Michael & Susan Dell Foundation have been on board of Kinara since 2014.
The increased investment by Unitus Impact Fund and Michael & Susan Dell Foundation, along with the new funding and debt arrangement from SCUF gives Kinara incomparable access to market competitive debt via existing entities and network, thereby propelling Kinara’s growth. Dedicated exclusively to serve MSME entrepreneurs who do not have land or property collateral to pledge, Kinara’s proprietary lending model and market approach has been substantiated with this new funding.
Rahil Rangwala, Michael & Susan Dell Foundation, said,
“This investment renews our strong belief that Kinara Capital has the potential to impact the livelihoods of thousands of micro and small entrepreneurs, the core engine of job creation in India. The company, led by CEO Ms. Hardika Shah continues to impress us with their successful management and execution of collateral free lending to MSMEs. We are proud to expand our support and invest in Kinara Capital, a pioneer in lending to the financially neglected segment of MSME entrepreneurs.”
Jayaroopa Jeyabarathi, Unitus Impact Fund, said,
“From the start, we have recognized the vision, the talent and the laser sharp determination of Kinara Capital’s CEO Hardika Shah. Kinara’s innovative risk-management strategies such as localized psychometric testing, and supply-chain financing, are unparalleled in this industry. Kinara’s knowledge of this customer segment and Kinara’s methodology has helped create a strong foundation for a high quality portfolio. The latest partnership gives everyone the confidence that Kinara Capital is the proven organization to help MSMEs in India. Lending in this space has a direct social impact on the success of the striving entrepreneurs, their employees, and on the local economies.”
Hardika Shah, CEO and Founder, Kinara Capital, said,
“We are proud to have gained the confidence of leading investors who value the hard work and innovativeness of Kinara Capital. We thank our existing investors for their support – Unitus Impact, Michael & Susan Dell Foundation, Sorenson Impact Foundation, and Mr. John Ayliffe. And we heartily welcome our new majority investor Shriram City Union Finance Ltd. The strategic input from Ms. Subhasri Sriram as our Board member will be invaluable as we continue our expansion efforts in to new regions. MSMEs are job creators but they have been systematically ignored due to a lack of property collateral. We are humbled that our unconventional lending approach has today been endorsed by industry leaders.”
Kinara Capital was incepted in 2011 in a bold move to provide collateral free loans in the range of INR 1-10 Lakh to the missing middle MSME segment in India. Addressing the INR 1 Trillion debt gap between microfinance and commercial capital, Kinara Capital has financed over 3000 loans at a 99% recovery rate and has created an INR 50 Crore portfolio in a relatively short amount of time. Kinara currently serves MSME entrepreneurs from 12 offices in three states. The company will be opening new offices in other parts of Maharashtra and has plans to further expand its reach in Andhra Pradesh and Telangana in 2016.
Kinara Capital’s typical customer is often a first generation entrepreneur with basic education, seven to 10 years of field experience and a typical business turnover of INR 3-5 Lakh per month. Kinara also provides a receivables financing product that is typically inaccessible for micro and small businesses. Kinara funds a wide range of MSMEs, more than 80 percent of them being in urban areas. The company’s portfolio spans a variety of small scale manufacturing businesses such as auto parts, electrical components, kitchen appliances, food products, agri-equipment, packaging products, and more.
About Michael & Susan Dell Foundation
The central mission of the US-based Michael & Susan Dell Foundation is transforming the lives of children living in urban poverty through better health and education and family economic stability. In 2006, the foundation expanded its focus to reach children outside of the US. The scale of need among India’s children, coupled with the country’s unique combination of economic and urban growth, made it a natural hub for furthering the foundation’s mission. As of 2014, the Dell family foundation had committed more than INR 856 crores ($138 million USD) toward the effort to drive measurable social progress for India’s children.
About Unitus Impact Livelihoods Fund
Unitus Impact is a venture capital firm that invests in scalable companies working to increase incomes and improve the livelihoods of the working poor in Asia’s fastest growing economies. With investments in companies in China, India, Indonesia, Philippines, and Vietnam, the Unitus Impact Livelihoods Fund aims to support the growth of livelihood companies in India and SE Asia that link underserved populations to formal markets, engage the working poor as suppliers or distributors, build innovative supply chain or distribution platforms, and provide underserved consumers with products and services that improve their lives, while generating strong financial returns for its investors.
About Shriram City Union Finance Ltd.:
The twenty nine-year old Shriram City is among the more important players in the retail financing space. The company offers multiple loan products to small business owners and for acquiring assets such as two wheelers, commercial vehicles, passenger vehicles and homes. It also offers loans against gold ornaments and for personal consumption. A deposit-accepting NBFC, Shriram City is a part of the Rs. 90,000 Crore Chennai-based Shriram Group.
About Kinara Capital
Kinara Capital has pioneered lending practices by innovating a financially inclusive solution to provide collateral-free loans to entrepreneurs of micro-small-medium enterprises (MSMEs). Kinara Capital was founded in 2011 by Hardika Shah, who spent years as a management consultant globally and was motivated to change tracks to help hardworking entrepreneurs who were systematically ignored by traditional lenders. Kinara Capital aims to create 100,000 net new jobs and impact 1 million lives in the span of the next five years in India. Hardika Shah was named an Ashoka Fellow for her innovative approach in addressing the ‘missing middle’ INR 1 Trillion debt gap between microfinance and commercial capital. Kinara Capital is a registered Non Banking Financial Company (NBFC) in India. For more information, visit www.kinaracapital.com