Kinara Capital, a Bengaluru-based fintech lender focusing on small business entrepreneurs, said it has raised Rs 70 crore in a financing round from Invest in Visions GmbH (IIV).
Classified as an ESG Impact Fund by the European Union, Kinara Capital will further IIV’s microfinance fund mandate of enabling credit access to small businesses.
Kinara said it has accelerated early access to credit with data-based credit decisions and digital processes that facilitate a 24-hour turnaround time from loan application to loan disbursements. Fast access to capital without property collateral addresses the primary obstacles faced by the micro, small, medium enterprise (MSME) sector in India.
This fund will unlock access for hundreds of MSMEs to get loans in the range of Rs 1-30 lakh. In addition, Kinara’s HerVikas programme is for women entrepreneurs.
“Kinara Capital and Invest in Visions GmbH started our journeys a decade ago and our paths have finally crossed. We are joining hands to enable the financial inclusion of even more MSMEs in India. Dedicated support from Sgents for Impact to execute this transaction underscores our transparent processes and our focus on achieving measurable social impact,” said Hardika Shah, founder & CEO, Kinara Capital.
With a focus on micro, small and medium enterprises (MSMEs), Kinara has disbursed Rs 2,400 crore across 65,000 plus collateral-free small business loans.
Kinara, founded by Hardika Shah in 2011, is a non-banking financial company (NBFC) which is operated by Visage Holdings and Finance Pvt. Ltd.
It provides collateral-free business loans in the range of Rs 1-30 lakh, without property collateral, to a range of MSMEs from small-scale manufacturing industries to general retail shops to service businesses, filling the gap between microfinance and commercial capital in India.
It offers both digital and doorstep customer service options with 24-hour direct disbursements and flexible payment options on 400 plus platforms such as Google Pay.
In May 2019, the NBFC had raised Rs 100 crore ($14.3 million) from Gaja Capital, GAWA Capital, the Michael and Susan Dell Foundation, and Patamar Capital.
It had raised Rs 32 crore ($5 million) from Switzerland-based impact investor ResponsAbility Investments AG in July 2018.
Invest in Visions GmbH established the first microfinance fund in Germany and since has expanded to specializing in SME financing, renewables and education. IIV seeks to invest in ethical organisations that can demonstrate sustainable profitability and social impact.
AFI plays the crucial role of advising IIV on loan transactions wherein it, inter-alia, conducts verification and plausibility checks of investee organizations based on the German Federal Financial Supervisory Authority’s recommendation to assess sustainability risk and its ability to deliver measurable social impact.
The firms said the partnership between Kinara Capital, Invest in Visions GmbH (IIV), and Agents for Impact (AFI) to advance financial inclusion will meet multiple United Nations Sustainable Development Goals (UN SDGs), with primary UN SDGs 5, 8, 10 and secondary UN SDGs 1, 2, 3, 4, 9.