Gaja, MSDF reinvest in Kinara Capital as US DFC backs debt

 Gaja, MSDF reinvest in Kinara Capital as US DFC backs debt

Non-banking finance company Kinara Capital said Monday it has raised Rs 100 crore (US$13.8 million) in debt and equity funding to increase lending to micro, small and medium-sized enterprises.

The Indian fintech company said in a statement it secured Rs 74 crore ($10 million) from private-sector lender IndusInd Bank. The debt is fully guaranteed by the US International Development Finance Corporation (DFC).

Equity contribution from Kinara’s existing investors accounted for the remaining amount. These investors are mid-market private equity firm Gaja Capital, impact investor GAWA Capital, the Michael & Susan Dell Foundation (MSDF) and early-stage investment firm Patamar Capital.

Kinara will use the fresh capital to lend to MSMEs across manufacturing, trading and services sectors in India.

Roopa Satish, head of corporate and investment banking, and sustainable banking at IndusInd Bank, said the guaranty from DFC eliminates foreign exchange rate fluctuation risk from Kinara’s balance sheet. The DFC is the development finance institution of the US government.

Kinara was founded in 2011 and is led by founder and CEO Hardika Shah. Its previous financing rounds include raising about $5 million from Swiss impact investor ResponsAbility Investments AG in 2018 and $14.3 million in 2019 from Gaja, GAWA, MSDF and Patamar.

Kinara offers loans to a wide range of MSMEs such as small-scale manufacturing industries and retail shops. It has so far disbursed Rs 2,000 crore across more than 56,000 small business loans.

The lender says it doesn’t take a collateral from borrowers. Instead, it uses artificial intelligence and machine learning-based data-driven automated credit decision process.

Sumit Upadhyaya

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