Offering Transparent and Secure Business Loans for MSMEs in India

End Borrowers

Kinara Capital

Kinara Capital, a Bangalore based non-bank financial institution (NBFI), lends to microenterprises in southern and western India. Kinara was founded by Hardika Shah in 2011. During her work as a consultant, Shah realized that access to capital was a major barrier to growth for small businesses and entrepreneurs in India. In response, she founded Kinara to address the credit challenges of microentrepreneurs.

Kinara manages a $35 million loan portfolio, reaching over 6,500 clients across 40 branches. The typical borrower generates approximately $1,500 in revenue and employs 2-10 individuals. In January 2017, MicroVest provided a $3 million loan to Kinara, becoming its first international lender. Since then, Kinara onboarded another international lender and raised nearly $15 million of equity. By the end of FY2018, its loan book is projected to grow to $50 million. Kinara is well positioned to make a direct impact on the livelihoods of small entrepreneurs.

End Borrower Spotlight

Annamalai has over 25 years of experience in the auto-part manufacturing industry. In 2011, Annamalai founded Manjuantha Hydroflexibles—an auto parts manufacturing company for trucks and lorries. To launch the business, Annamalai sold part of his property to purchase a computer numerical control (CNC) machine that automated his manufacturing process. Almost immediately the business took off.

Annamalai approached his bank for a business loan to keep up with growth, but was denied because Manjuantha Hydroflexibles had only been operating for eight months. Even when he offered his house for collateral, the bank refused. Before learning about Kinara, Annamalai’s only option was a moneylender with a 60% interest per annum.

Kinara solved Annamalai’s credit problem. In March 2012, Kinara gave him a loan of $6,700 to buy a used CNC machine. With this loan, Annamalai increased his staff from four to seven employees and grew monthly revenue from $2,500 to $3,300. Since then, Annamalai has completed multiple loan cycles with Kinara. He has also taken advantage of Kinara’s receivables financing product, enabling him to access short term working capital. Annamalai plans to continue growing his company—he recently purchased and in a nearby town to use for a new manufacturing unit.

This impact narrative was originally published in February 2018. Impact metrics included here will reflect this time period.