India settled lender to small business, Kirana Capital has raised $10 million from IndusInd Bank with a 100% guarantee from the U.S. International Development Finance Corporation (DFC).
“This is a part of a debt and equity round of INR 100 crores, with equity contribution coming from existing investors including Gaja Capital, GAWA Capital, Michael & Susan Dell Foundation (MSDF), and Patamar Capital,” Kirana in its issued statement said.
“The special $10 million investment for onward lending to small business entrepreneurs will be deployed over five years from IndusInd Bank’s Impact Investing division with full backing from DFC, part of the US federal government and an emerging markets impact leader. This three-way partnership between Kinara Capital, IndusInd Bank, and DFC unites the organizations’ shared goals to promote entrepreneurship, financial inclusion, and job creation,” company said.
Speaking on the fundraise, Hardika Shah, Founder & CEO, Kinara Capital, said, “Our partnership with IndusInd and DFC underscores our shared commitment to ease the credit hurdle faced by most small business entrepreneurs in India,”
“MSMEs galvanize India’s economy with income generation and job creation and there is an ever-increasing demand for financing for businesses to rebuild and grow this year. This investment from IndusInd Bank and DFC will accelerate financial inclusion of small businesses, thereby invigorating local economies,” Hardika added.
Commenting on the investment in Kirana Capital, Roopa Satish, Head, Corporate & Investment Banking, CSR & Sustainable Banking, IndusInd Bank, Said, “We are glad to have associated with DFC to support a strong impact creating entity, Kinara Capital, in their growth trajectory. The guarantee from DFC eliminates foreign exchange rate fluctuation risk from the balance sheet of Kinara and it has become an important tool to mobilize debt funding for impact space companies.”
“We hold the organizations that we fund to a very high standard and Kinara Capital is a role model when it comes to last-mile delivery. Commitment towards financial inclusion from Kinara Capital has made it possible for us to collaboratively help India’s small business entrepreneurs. We are motivated by the high potential and the high prospects of the diverse MSME sector in India and proud to partner with both IndusInd and Kinara Capital,” Loren Rodwin, Managing Director, Social Enterprise Finance Team, Office of Development Credit at U.S. International Development Finance Corporation (DFC) added.