Kinara Capital – Best For-profit in a Developing Economy – Special Commendation | The MAIAs 2022
In many developing countries, small and medium enterprises can struggle to get credit. So how can they learn about finance without access to money?
MAIAward co-founder Michael Gilmore said, “MSMEs are the backbone of the economy but often find it hard to get funding. Sometimes, businesspeople lack financial literacy and are excluded from getting the credit they need. Kinara Capital solves both of these issues, which is why the MAIAward judges awarded them a Special Commendation.”
Hardika Shah, the Founder and CEO of fintech Kinara Capital, says, “The company was established to address the problem of the vast credit gap that exists in the Indian MSME (micro-small-medium enterprises) sector. This is a ‘missing middle’ credit gap valued by the World Bank at over $300 billion.”
Kinara Capital was founded in 2011 to help MSMEs in India obtain credit. It has since disbursed over USD 300 million to more than 40,000 small businesses. However, small businesses aren’t just benefitting from the funding.
“By providing fast and flexible collateral-free business loans, we are helping these businesses establish themselves. Furthermore, as 90% of Kinara’s customer base is new to credit, receiving its first-ever business loan enhances their financial literacy and increases their credit score,” Hardika says.
“To remedy the lack of financial literacy, we have started offering digital courses to our customers, bringing them relevant MSME information. This is done in the local vernacular to provide them with guidance, for example, on topics such as how to obtain an Udyam Registration Certificate.”
To improve the efficiency and speed of applications and make loans more financially inclusive for small businesses, Kinara has developed innovative digital processes. These cut eligibility checks, allow 24-hour disbursement and help MSME entrepreneurs.
Hardika says, “We use a combination of in-person interactions and data-driven AI and digital processes to deliver collateral-free loans. In addition, we provide personalised and multilingual customer service to support and educate small business entrepreneurs, with in-person or phone support in local dialects.
“We also help them digitise their data, and to further ease the application process, we developed the ‘myKinara’ customer app. With our user-friendly vernacular digital loan application process, users get faster financing while becoming more financially literate. We are reducing the information gap by introducing new value-add skilling services for Kinara customers.”
Kinara Capital is headquartered in Bangalore with operations in 110 branches across six states in India. It continues to grow and is helping increasing numbers of MSMEs.
“There are 63 million MSMEs in India struggling to access formal lending options,” Hardika says. “We envision a financially inclusive world where every entrepreneur has equal access to capital.
“In addition to making credit more available and improving financial literacy, we also support other minority groups. For example, Women own less than 14% of all businesses in India. To encourage women entrepreneurs, Kinara Capital has launched the HerVikas programme, which offers an upfront discount to female business owners. No one should be left behind.”
Michael Gilmore, MAIAwards co-founder, said, “We love the inclusivity provided by Kinara and their desire to help smaller and less experienced entrepreneurs get established. Providing MSMEs with access to credit and teaching them basic financial literacy is helping tens of thousands of people secure their financial future and security.”
For more information, you can visit their website, or email us at michael@www.maiawards.org.