How Kinara Capital’s Hardika Shah Was Inspired to Help Small Business Entrepreneurs Think Big


“When life gives you lemons, make lemonade” is an old adage used to encourage optimism in the face of adversity. For Hardika Shah, founder of the fintech loan marketplace Kinara capital, that has been his mantra all his life.

“Coming from a middle-class family, having a blind but ambitious father and an entrepreneurial mother, I saw a lot of struggle, inspiration and a lot of jugaad from my early years,” says Hardika. “The importance of hard work and education has always been emphasized. Against cultural norms, my parents let my sister and I break down barriers on what is “acceptable” for girls to follow. “

Today, with Kinara Capital, Hardika is transforming the lives of many women like her and helping them get back on their feet.

Kinara Capital offers unsecured commercial loans for asset purchase and working capital in the range of Rs 1 lakh to 30 lakhs in a 24 hour disbursement cycle. Credit scores are performed using a data-driven automated credit decision based on artificial intelligence and machine learning (AI / ML).

The startup has pledged to pay Rs 100 crore in business capital to women entrepreneurs with its HerVikas program which offers an automatic initial rebate to women business owners, without requiring separate documentation.

“We challenge standard industry practices, which unfortunately include asking a woman how she runs a household and a business, questions about childcare and whether they have ‘permission’ to. apply for a business loan from their father or husband, ”she adds. .

Overall, in its mission to close the credit gap for MSMEs, Kinara Capital has disbursed over 2000 crore INR on over 56,000 loans in over 90 urban, peri-urban and rural areas in India. The social impact of their financial inclusion work has led to an additional INR 700 crore income generation for small business entrepreneurs, and has led to the creation or maintenance of over 250,000 jobs, as claimed by founder.

To date, they have raised $ 300 million in debt and equity financing from various partners. The startup has also received a lot of recognition and support from leading social impact organizations including Michael & Susan Dell Foundation (MSDF), GAWA Capital, Patamar Capital, Sorenson Foundation, US International Development Finance Corporation (DFC), Impact Investment Exchange (IIX), Blue Orchard, Liability and Symbiotics.

In a recent interaction with YourStory, Hardika goes through her life journey, the challenges faced and how she helps Indian women entrepreneurs achieve their dreams. Excerpts edited here:

The first trip

Hardika remembers that her family has always appreciated entrepreneurial qualities such as resilience and patience. Her father, blind and born in a small village in Gujarat, became an accomplished professor of political science at the University of Bombay. Today he continues to teach in the United States. Her mother always had entrepreneurial tendencies, was very active with volunteer groups and ran a few small businesses while Hardika was growing up.

The couple’s strong belief in their daughters led them to sell their house to pave the way for Hardika to continue her education in the United States. It was virtually unheard of in the late 1980s – for a middle class family to make such a huge sacrifice for their daughter.

“So, at 16, I boarded a flight to the United States on my own for my undergraduate studies. As they wished me goodbye at the airport, they reminded me not to be afraid, to be daring, to be true to myself and to accept to take risks in life because it is ‘is the only way change is possible, ”she said.

Hardika chose the then emerging field of IT and a career in management consulting. While working in Silicon Valley, she began making time for pro bono mentorship at Stanford and UC Santa Clara programs for social entrepreneurs. She was intrigued by the concepts of sustainable models that prioritized both community impact and profitability.

“So I decided to explore new possibilities and pursued a joint MBA with Columbia Business School and the Haas School of Business at UC Berkeley. And Business School thus became the genesis of the Kinara concept.

Take the path of entrepreneurship

While Hardika believes a lot has changed for today’s generation of women, she feels inherent challenges remain.

“During a visit to India, and reconnecting with people from my early days, I realized that my mother’s difficulties in starting a small business were exactly the same two decades later for small business entrepreneurs! She exclaims. “Economic liberalization had failed to close India’s massive credit gap for MSMEs and as a result, many of them were unable to grow their businesses.”

Women entrepreneurs in India face significant systemic challenges at all levels. However, these are more pronounced for women who are also micro / small entrepreneurs. For example,

  • less than 14% of all businesses in India are owned by women
  • the lack of formalization creates more obstacles to women’s access to formal finance
  • lack of support for childcare, family / household management or eldercare
  • those who prefer to speak in the vernacular or lack formal education, there is a lack of information on the basics on how to register a business or apply for a second KYC

In addition, IFC reports that women entrepreneurs are likely to face higher borrowing costs, provide collateral for a higher share of their loans, and face longer wait times. for loan disbursement compared to their male counterparts.

“These additional obstacles are therefore perhaps the reasons why more men are able to start and grow their own businesses, but not enough women are able to move from the role of worker to that of entrepreneur,” he said. she added.

Seeking to fill these gaps, she began developing risk assessment models during her business school years and then set up a field pilot project in India which was a resounding success. This inspired Hardika to close the chapter of her life in Silicon Valley and move to Bengaluru in 2011, with the sole purpose of creating Kinara Capital.

“Years after I flew to the US for my undergrad, I was again with my parents to wish me a safe trip – upside down this time – as I flew to the India starting over my whole life packed in two suitcases. Yet they told me the same thing even after all these years: be bold, be true to yourself, and remember that changing the world can only happen when you are willing to take risks for it. to make possible. “

The path to follow

India is the world’s fastest growing large economy with over 63 million MSMEs. The World Bank has estimated the MSME credit deficit in India to be around $ 300 billion, and that was before Covid! Thus, the demand is massive for Indian small businesses to access finance, especially as they are trying to rebuild and grow this year.

Kinara Capital seeks to leverage this with a three-pillar approach, thereby closing the credit access gap with an information gap on the user-friendly vernacular digital loan application process by introducing new value skills services. added for Kinara clients, and the gender gap supporting even more female entrepreneurs with our discounted HerVikas program.

Hardika firmly believes that change starts at the top, and for minorities to get a seat at the table, the opportunity must first be created!

“We are therefore one of the very few companies to have a predominantly female management team,” she added. Kinara Capital is also a welcoming place to work for the LGBT community and people with physical challenges. Some time ago they also joined forces with the National Association for the Blind (NAB).

“Growing up with a blind father, I appreciate that we find ways to open doors for everyone to have the opportunity to pursue a career in finance. Inclusiveness is one of our core values, and I am proud that our team across regions and departments hold it in high regard, ”concludes Hardika.

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