The funding is made possible with support from Agents for Impact (AFI)
Partnership will further financial inclusion of MSMEs in India
Bangalore/Frankfurt, NFAPost: Kinara Capital, a social impact fintech driving financial inclusion of India’s small business entrepreneurs, announced securing EUR 8 million (~Rs 70 crores) from Invest in Visions GmbH (IIV), pioneers of microfinance investments in Germany.
Agents for Impact, a sustainability connector of investors and social impact organizations, arranged this transaction for Invest in Visions and managed all commercial and legal aspects of this transaction for Invest in Visions from start to finish. Classified as an ESG Impact Fund by the European Union, Kinara Capital will further IIV’s Microfinance fund’s mandate of enabling credit access to small businesses.
Kinara has accelerated early access to credit with data-based credit decisioning and fully digital processes that facilitate a 24-hour turnaround time from loan application to loan disbursements. Fast access to capital without property collateral addresses the primary obstacles faced by the micro-small-medium enterprise (MSME) sector in India.
This fund will unlock access for hundreds of MSMEs to get loans in the range of Rs. 1-30 lakhs. In addition, Kinara’s HerVikas program for women entrepreneurs is addressing systemic inequalities and providing an upfront discount on collateral-free business loans.
Invest in Visions GmbH established the first microfinance fund in Germany and since has expanded to specialising in SME financing, renewables and education. IIV seeks to invest in ethical organisations that can demonstrate sustainable profitability and social impact.
AFI plays the crucial role of advising IIV on loan transactions wherein it, inter-alia, conducts verification and plausibility check of investee organizations based on the German Federal Financial Supervisory Authority’s recommendation to assess sustainability risk and its ability to deliver measurable social impact.
Kinara Capital Founder & CEO Hardika Shah said Kinara Capital and Invest in Visions GmbH started their journeys a decade ago and paths have finally crossed.
“We are joining hands to enable financial inclusion of even more MSMEs in India. Dedicated support from Agents for Impact to execute this transaction underscores our transparent processes and our focus on achieving measurable social impact. We are honored to partner with both IIV and AFI whose goals align extremely well with ours,” said Hardika Shah.
Invest in Visions GmbH (IIV) Founder and Managing Director Edda Schröder said IIV is pleased to partner with innovative leader Kinara Capital that is creating possibilities for the underserved small businesses in India.
“We recognized the immediate impact that access to credit can have on the local economy with quick income generation, so micro and small business financing in developing nations has always been our top priority. AFI eased the transaction for us by conducting a full assessment so that we confidently entered into the deal knowing that our Microfinance fund’s directive will be met in India,” said Edda Schröder.
Agents for Impact (AFI) CEO Andrij Fetsun said AFI is thrilled to have supported both IIV and Kinara Capital in their aligned mission of financial inclusion.
“Our goal is to perfectly match the needs and requirements of ESG investors and social impact organizations. In this case, we conducted a due diligence of processes and practices, and mapped social impact performance with consideration for the ground reality in India. Our efforts bring peace of mind to both parties so that they can focus on what they do best to service micro & small business entrepreneurs,” said Andrij Fetsun.
Partnership between Kinara Capital, Invest in Visions GmbH (IIV), and Agents for Impact (AFI) to advance financial inclusion will meet multiple United Nations Sustainable Development Goals (UN SDGs), with primary UN SDGs 5, 8, 10 and secondary UN SDGs 1, 2, 3, 4, 9.