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Mitigating risks in new ways

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Mitigating risks in new ways

Hardika Shah is the Founder and CEO of Kinara, a Bangalore based social enterprise that provides loans to micro and small enterprises in India filling the gap between microfinance and commercial capital. By financing the supply chain and mitigating risks in new ways, Hardika is creating new architecture to lend to the millions of small and medium enterprises without collaterals or credit history. She is providing enterprises with the critical support that has a huge multiplier effect of moving them up the value chain and to attain full economic citizenship.

Traditional banks are unwilling to make small ticket loans to these micro and small enterprises due to the perceived risk of such businesses especially without some form of collateral and microfinance institutions have also been unable reach SMEs due to regulations.

Kinara Capital provides term loans, short-term working capital loans and receivables financing facility to producers and providers across the value chain for asset purchase or working capital needs. The products have also flexible terms that factor in the income cycles and diverse requirements of SMEs. Most importantly, the customer-centric processes and supply chain integration enables Kinara to complete the loan process at an average of 10 days.

Hardika also introduced a unique risk assessment methodology. She introduced psychometric testing for the first time in the financial sector India. This not only helps her assess the integrity of the micro-entrepreneur and their intention to pay, but also mitigates risk of possible bias among her employees in identifying credibility of a client. Hardika has also been successful in engaging franchisors that are well capitalized to support the growth of their partners along with Kinara.

In order to reach more SMEs in the long term, Hardika sees Kinara Capital working with commercial banks as a direct sales plus (DSA+) agent wherein Kinara would originate the bank loan and also help banks service based on its risk mitigating methodology.

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