MICROCAPITAL BRIEF: Kinara Capital of India Raises $10m from IndusInd Bank for Assisting Small Businesses, with Guarantee from DFC

India’s Kinara Capital recently accepted a five-year loan of USD 10 million from Induslnd Bank, a unit of India’s Hinduja Group, to increase the financial inclusion of small businesses active in manufacturing, trading and services. The loan carries a full guarantee from the US government’s International Development Finance Corporation (DFC). Kinara offers loans primarily for asset purchases of up to INR 1 million (USD 13,800), with terms ranging from one to five years. It also offers lines of credit for up to 75 percent of invoices due for terms of three months to one year.

Kinara has offices in seven states and union territories in India and was founded in 2011. The firm is listed on the Bombay Stock Exchange as a debt entity under the registered company name Visage Holdings and Finance Private Limited. As of September 2019, the company had total assets of INR 9.29 billion (USD 131 million) and total income for the six month period ending 30th September 2019 of INR 1.02 billion (USD 14 million).

Established in 1994, IndusInd has approximately 2,000 branches across India as well as representative offices in the UK and the UAE. As of March 2020, the bank reported total assets of INR 3.1 trillion (USD 40 billion) , total deposits of INR 2.0 trillion (USD 26 billion) and a gross loan portfolio of INR 2.07 trillion (USD 27 billion).For the 12 months ending March 2020, it reported return on assets of 1.5 percent and return of equity of 15 percent. It is headquartered in the state of Maharashtra.

DFC was launched in 2020 to “help businesses expand into emerging markets, foster growth and improve lives in the developing world while reinforcing US foreign policy and national security interests.” The organization has an investment cap of USD 60 billion to deploy in forms such as equity placements, insurance, technical assistance and research. DFC focuses its efforts on low-income and lower-middle-income countries in areas such as “energy, healthcare, critical infrastructure and technology.” Upon its founding, DFC took over the work of the Overseas Private Investment Corporation (OPIC) as well as the Development Credit Authority of the US Agency for International Development.

By Aakansha Shenoy, Research Associate

Sources and Additional Resources

BusinessWire article
https://www.businesswire.com/news/home/20210222005502/en/Kinara-Capital-Secures-USD-10-Million-from-IndusInd-Bank-with-100-Guaranty-from-U.S.-International-Development-Finance-Corporation-DFC

Kinara Capital homepage
https://www.kinaracapital.com/

Visage Holdings and Finance Pvt Ltd. financials – BSE India webpage
https://www.bseindia.com/corporates/NBFC.aspx?Code=955672&qtr=267&Rtype=P&Company=Visage-Holdings-and-Finance-Pvt-Ltd

IndusInd Bank homepage
https://www.indusind.com

Hinduja Group homepage
https://www.hindujagroup.com

US International Development Finance Corporation homepage
https://www.dfc.gov/

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