Lending a Hand to Small Businesses

Hardika Shah’s Kinara Capital supports underserved small businesses, including women entrepreneurs, through collateral-free business loans.

By Michael Gallant

September 2021

Lending a Hand to Small Businesses

Hardika Shah is the CEO of Kinara Capital, which has helped create over $100 million in added income for the rising entrepreneurs to which the firm lends, and supported hundreds of thousands of jobs around India. Photograph courtesy Hardika Shah

This is the fourth in a four-part series showcasing successful female CEOs in India.

As founder and CEO of the Bengaluru-based financial technology company Kinara Capital, Hardika Shah leads with a simple but powerful mission: to open the vast benefits of the financial world for underserved small business entrepreneurs in India.

Shah first became inspired to pursue this ambitious goal thanks to her mother, who ran a small business in Mumbai. “I saw how difficult it was for her to build her business due to lack of financing. Years later, I reconnected with people from my early days on a visit back to India,” Shah says, referring to her return after 15 years of studying and working in other countries. “It made me realize that the struggles which my mother faced to set up a small business were exactly the same two decades later.”

Indeed, many small and women-owned businesses remain locked out of financial opportunities that could help them grow, Shah says. And though there are currently over 60 million similar enterprises in India that employ over 120 million people, “most formal lending institutions do not lend to them, especially without property collateral,” she describes.

Shah and her colleagues work hard to reverse that troubling dynamic. To date, Kinara Capital has opened over 100 branches in more than 90 Indian cities to provide collateral-free business loans to small business entrepreneurs in need. “We have also introduced a discounted loan program, HerVikas, for women entrepreneurs and pledged to disburse at least $15 million to women-owned businesses in India,” Shah says.

The results speak for themselves: Kinara Capital’s work has helped create over $100 million in added income for the rising entrepreneurs to which the firm lends, and supported hundreds of thousands of jobs around India.

Along with Shah, Kinara Capital is run mostly by women—a notable fact, given that banking stubbornly remains a field dominated by men. In her hiring and other business practices, Shah draws inspiration from notable feminists from the past and present to elevate the role of women in finance. “At Kinara Capital, the CEO, CFO, and the majority of our management team are all women. And, I am very proud that we have demonstrated growth and profitability in a heavily male-dominated field,” says Shah. “An S&P report recently proved that companies with both women CEOs and CFOs performed better. Yet, even with Fortune 500 companies, there are less than five companies that have women in both CEO and CFO roles. Finance or not, we all have a long way to go!”

In February 2021, Kinara Capital secured $10 million from IndusInd Bank, with a 100 percent guarantee from the U.S. International Development Finance Corporation (DFC), for the expansion of financial inclusion of micro, small and medium enterprises (MSME) in the manufacturing, trading and services sectors in India. DFC, the U.S. government’s development finance institution, partners with the private sector to finance solutions to the most critical challenges facing the developing world today.

“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,” says Shah. “This investment from IndusInd Bank and DFC will accelerate financial inclusion of small businesses, thereby invigorating local economies.”

“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,” said Loren Rodwin, managing director, Social Enterprise Finance Team, Office of Development Credit at DFC. “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.”

To girls and women who wish to follow in Shah’s footsteps, she offers the following advice: “You must learn to become okay early on with being a round peg in a square hole. You will be constantly questioned and judged no matter who you are and what you do, how you look, so let that not impede your confidence and stay focused on your goals. And, I would add that girls and women of any age today are critical to bridging the gender gap. Each one of you has the ability to uplift yourself and other girls and women in your lifetime.”

To read about more ventures by successful women CEOs supported by DFC, see A Fruitful Venture and Opening Doors to Financial Services.

Michael Gallant is the founder and chief executive officer of Gallant Music. He lives in New York City.


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