British International Investment is leading a new equity round in fintech Kinara which aims to facilitate the provision of loans to small businesses in India via an app-based model.
The UK’s British International Investment (BII) is leading a new equity round of around INR2bn (€24.75m) in Bangalore-based fintech company Kinara Capital, which aims to facilitate the provision of loans to small businesses in India via an app-based model.
Existing investors Nuveen and ASN Microkredietfonds, advised by Triple Jump, also participated. Other equity investors include Gaja Capital, GAWA Capital, the Michael & Susan Dell Foundation (MSDF), and Patamar Capital. The Edelweiss Financial Services Limited acted as advisor for the latest deal.
The investment is intended to boost Kinara’s assets under management fivefold by 2025 to INR 60bn by boosting financial inclusion through use of its app, myKinara.
The app is used by micro-, small- and medium-sized enterprises (MSMEs) in the manufacturing, trading, and services sectors to arrange collateral-free business loans in INR 100,000-3m range.
According to Kinara, the app can take small business entrepreneurs in sectors often overlooked by formal lending institutions from loan decision-to-disbursement within 24-hours, backed by artificial intelligence. It has a strong focus on providing financial inclusion for women.
The company says it plans to reach over 200,000 MSMEs in more than 100 cities in India over the next three years. It claims that growth would support over 1 million jobs and generate over INR 30bn in incremental income for MSMEs.
Kinara was founded in 2011 by CEO Hardika Shah, building on a track record of nearly two decades as a management consultant working in the US, Europe and Asia. She has built in a focus on promoting gender parity into the company’s activities. Women make up the majority of Kinara’s management team and the company’s HerVikas programme is designed to advance women entrepreneurs.
“The combined expertise and capital infusion from BII, Nuveen and Triple Jump, will expand Kinara Capital’s offerings to meet the rising demand of the MSME sector in India. This year, India’s GDP growth has exceeded pre-pandemic levels signifying the resilience and growth prospects of small business entrepreneurs,” she said.
The investment chimes with BII’s aim of investing in companies that show strong potential to expand their development impact and that use innovative tech solutions with high potential for scalability, according to Manav Bansal, managing director and head of India at BII said.
“We are especially excited by its commitment to helping to expand financial inclusion to MSMEs, including increasing women’s access to finance which in turn promotes women’s entrepreneurship,” he said.
The company qualifies for funding via the 2X Challenge, an G7-backed initiative overseen by 2x Collaborative to invest and mobilise capital in support of projects that empower women as entrepreneurs, business leaders, employees and consumers.