08 October, 2013– Impact Investment Exchange Asia (IIX) announced today that its Impact Partners platform has assisted Bangalore-based Kinara Capital in closing a Series A funding round totaling approximately US$1 million. IIX’s Impact Partners platform was instrumental in securing a group of co-investors to invest alongside two US-based foundations in this deal.
Kinara Capital (Kinara)
There are 26 million small enterprises in India, and less than 5% of them have access to commercial capital. Kinara is a young, social finance business that fills in the gap between microfinance and commercial capital through an innovative supply-chain financing model. By leveraging India’s relationship-based culture, Kinara integrates into existing supply chains in order to reduce its customer acquisition costs and its portfolio risks.
Kinara provides loans of between US$2,000 and US$20,000 to micro and small enterprises in India that have a turnover of less than US$400,000. By addressing a major working capital need that is not being served by existing Indian financial institutions, Kinara helps the critical “middle” to expand their business, increase their capacity, and generate incomes leading to livelihood improvement and economic development.
“The investment from the investors that IIX’s Impact Partners platform was able to bring together is of tremendous value to Kinara as it will be used to fund 200+ new small business loans and help create 1000+ new jobs at the BOP level in India.”– Hardika Shah, Founder & CEO, Kinara Capital
Kinara approached IIX’s investor base having already secured lead commitments from two US-based impact investors but needing help in locating additional investors to allow it to meet its full fundraising goal. IIX profiled Kinara on its Impact Partners platform, where it was introduced to the Impact Partners membership base of mission-aligned investors. IIX also invited Kinara’s Founder and CEO, Hardika Shah, to present in person to Impact Partner members at a Social Enterprise Showcase hosted by IIX. This process led to 15 investors co-investing with the lead investors in Kinara’s investment round. A special purpose vehicle was created through which these investors could aggregate their investment in Kinara.
“Kinara Capital is an innovative business that generated a lot of interest from a number of investors motivated by the social impact that could be created by providing working capital loans for SMEs in India. To accommodate all of these investors, IIX assisted in structuring a SPV that allowed Kinara to aggregate all these small investment amounts. Through this investment, we hope Kinara is able to continue filling the funding gap for SMEs in India, to support equitable growth.” – Robert Kraybill, Managing Director, IIX
Impact Investment Exchange Asia (IIX) is a Singapore-based organization with a mission to provide Social Enterprises (SEs) in Asia greater access to capital, allowing them to more rapidly expand the impact of their activities.
IIX offers three investment platforms –Impact Incubator™, Impact Partners™ and Impact Exchange™. Impact Incubator focuses on raising seed capital for start-up SEs while Impact Partners is a private placement platform dedicated to growth-stage SEs that are seeking expansion capital. IIX also recently announced the launch of Impact Exchange, operated by the Stock Exchange of Mauritius in collaboration with IIX. Impact Exchange is the world’s first “social stock exchange”, a regulated stock exchange dedicated to listing and trading securities issued by mature SEs and other socially-driven organisations. IIX’s sister not-for-profit company, Shujog, assists in capital raising through its proprietary impact assessment, research, advocacy and advisory work.
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