Michael & Susan Dell Foundation backs MSME lender Kinara Capital

Bangalore-based micro, small & medium enterprise (MSME) focused non-banking finance company (NBFC) Kinara Capital has received an undisclosed amount in funding from Michael and Susan Dell Foundation (MSDF) in lieu of a minority stake in the company, as per a press release.

Satyam Darmora, portfolio lead-Family Economic Stability at MSDF, has been appointed as a board member of Kinara Capital. The 'Family Economic Stability' portfolio of MSDF includes more than 25 micro-finance and skill training institutions.

“Kinara recognises that providing the right financing solutions to MSMEs has the potential for significant economic and social impact,” Hardika Shah, CEO and Founder of Kinara Capital, said in the release.

“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,” Shah added.

Founded in 2011, Kinara Capital has financed over 1,200 loans with a 99.9 per cent recovery rate. The firm funds a wide range of MSMEs in both urban and rural areas, with a typical business turnover of Rs 3 lakh to Rs 5 lakh per month. The company aims to create 100,000 net new jobs and impact 1 million lives in five years in India.

It provides collateral free loans in the range of Rs 50,000 to Rs 10 lakh 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’s customer is often a first generation entrepreneur with basic education and 7-10 years of field experience.

Its borrowers includes companies engaged in manufacturing auto parts, electrical components, kitchen appliances, artisan products, eco-friendly products, agri-equipment and packaging products. The bulk of its lending is in urban areas.

"Kinara Capital and its CEO Hardika Shah caught our attention because of their innovative approach towards solving the sizeable lending issues in India for the MSMEs that contribute to more than 20 per cent of the nation's GDP," Debasish Mitter, country director for India at MSDF, said.

Set up in 1999, the Dell family foundation is supported by the couple primarily through investing the proceeds of sales of shares of US-based technology company Dell Inc.

(Edited by Joby Puthuparampil Johnson)

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