Digital Lender Kinara Capital Raises $14 Mn From Impact Investors

Bengaluru-based digital lending company Kinara Capital has raised INR 100 Cr ($14.2 Mn) from private equity and impact investors, Gaja Capital, GAWA Capital, Michael & Susan Dell Foundation and Patamar Capital.

Kinara Capital was founded in 2011 by Hardika Shah. It provides online loans between INR 2-25 Lakh ($2,855 – $3,569) range without property collateral to small businesses.

The company is built on a fully digital platform, which eliminates paperwork and saves time for both customers and employees to fast track the credit decision process. The funds are disbursed within five to seven days of receiving the loan application. Kinara claims to have disbursed INR 1,160 Cr in over 33,785 loans till date.

According to Kinara, this round of funding will help accelerate its growth in new and existing markets and increase its investment in technology to improve customer experience and assess credit decisions at a faster rate.

The company is also looking to expand its investment in services that refine the customer experience with features such as autopay and auto-disbursement. On the tech front, the company will also develop its proprietary machine-learning lending algorithms to fast track financial inclusion for thousands of small business entrepreneurs.

“Impact-focused sustainable growth is at the heart of all that we do to create access to capital for small business entrepreneurs. When committed to transforming lives, we believe in leading by example – we run a profitable organization that practices integrity, transparency, and treats customers with dignity,” said Hardika Shah, founder and CEO of Kinara Capital.

The company plans to add 20 branches in high-growth locations in Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu and Telangana. Currently, Kinara has 90 branches across Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Telangana and the union territory of Puducherry.

Inc42 in its Annual Tech Startup Funding report 2018 noted that fintech startups raised $1.4 Bn across 121 deals in the year with top-five funding grossers being PolicyBazaar, Pine Labs, LendingKart, PhonePe and ClearTax.

Recently in May, Delhi-based online lending startup StashFin partnered with Fullerton India for $15 Mn onward lending. The funds will help StashFin and Fullerton expand to reach and create better efficiencies.

Also, Mumbai-based micro-lending startup Ftcash raised $7.23 Mn (INR 50 Cr) in a Series A round of funding led by two new investors, Dutch development finance institution FMO and US-based non-profit investor Accion International.

In April, Mumbai-based digital lending startup Happy Loans raised $20 Mn in an equity and debt funding round from Indian and US strategic investors, and financing lines from institutions including DMI Finance.

Sweden-based caller identification app Truecaller is also planning to provide a full spectrum of financial services with a focus on digital lending service in India. The company will be leveraging the online payments app Chillr to enable this.

A 2018 BCG report said that the country’s digital lending market has the potential to become a $1 Tn (INR 71 Lakh Cr) opportunity in the next five years. Of this, personal lending is estimated to grow to a $50 Bn market, growing at a rate of 30% every year.

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