Banking Frontiers|January 2020
An NBFC that exclusively funds small businesses in the manufacturing and trading sectors and that offers these funds without any collaterals is a rarity indeed in the Indian financial services domain. But that’s Kinara Capital, which today is fulfilling the last mile financial inclusion with the help of technology tools and personalized customer service. The company confines to offering loans in the range of `200,000-`2.5 million to small businesses alone and these businesses are assured of availing the loans in a matter of 5 to 7 days without any collateral security.
“We are dedicated to driving financial inclusion of small business entrepreneurs in India,” says Hardika Shah, founder and CEO of Kinara Capital. “About 90% of our customers are new to business credit. Getting a loan from a bank is most often not an option for them. By opening up access to capital, we see it time and again how empowering it is for small business entrepreneurs who can turn their dreams and aspirations into reality,” she adds.
NO LAND, BUILDING
What’s unique about the NBFC is that it does not accept land or buildings as collateral security. It does not collect any property papers either. Instead, it believes in shouldering the risk when the mission is to drive financial inclusion. Hardika Shah believes making lending decisions solely on the availability of land collateral stymies progress, especially in a vibrant economy like India where there are millions of micro, small and medium enterprises. “We have proven with our proprietary risk-assessment methodology that unsecured lending is possible and sustainable,” she adds.
Kinara Capital has disbursed Rs10 billion across 30,000 loans to small businesses that has directly led to the creation of 10,000+ new jobs, including for first-time earners and women. Led by a women-majority management team, the company has impacted over half a million lives in India.
ESSENTIALLY A FINTECH
Hardika Shah elaborates that the business model the company has adopted is a blend of fintech with doorstep customer service. “It really is an orchestra with a lot of moving parts that all work together to deliver top service and top value to our customers. As a result, the majority of our customers return to us to secure their second, third, and fourth loans as they continue to grow their business,” she reveals.
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