Success Stories:
Her Story Her Way

Brief introduction about yourself and tell us something about Kinara Capital.
I grew up in a middle-class family in Mumbai and wanted to pursue a liberal arts education in the US. In the 80’s, it was uncommon for most middle-class girls to even think about going to college in the US due to the very high costs. Thankfully, both my parents were very supportive and so at age 17, I landed at a small college in the heartlands of America. I worked nearly fulltime to put myself through college and soon after graduation I joined a top-tier management-consulting firm. For almost twenty years, I worked across four continents, led global teams and resolved complex business and technology projects for international companies. After two decades of studying and working overseas, I moved back to India four years ago to launch Kinara Capital because I was motivated to help local entrepreneurs bridge the enormous capital gap that inhibits them from growing their businesses. Kinara Capital is a social business based in Bangalore that provides collateral-free loans to micro and small enterprises to help them grow their businesses and enable economic development at the bottom of the pyramid.

From a corporate professional to a social entrepreneur.
What inspired you to make the switch?

My switch to becoming a social entrepreneur was gradual. It started initially with a desire to give back to India and this translated into a variety of volunteering activities with India focused foundations. When I was working in Silicon Valley, I was invited by a university to serve as a mentor for a leading social impact program, and through this experience, I became drawn to the idea of addressing social challenges with market-based solutions. As India was becoming more prosperous and prominent internationally, the divide between the highly educated and the less educated wasn’t shrinking fast enough as many had predicted at the turn of the century. All through my executive MBA program with UC Berkeley and Columbia University, I could not stop thinking about how to address some of the challenges in India. While in business school, I began researching the root causes of this market gap for small businesses to access capital. I then ran a pilot project to provide small ticket loans in an innovative supply chain model to validate my hypothesis on how we could address this gap. I was motivated to find a way to make financial access possible for micro-small-medium enterprises (MSMEs) that did not have any land/property collateral. I also knew that this meant drastic changes and trade-offs in my life as well as for my husband. I had to leave behind a career in management consulting and a life that I had spent years building globally. Moving to India was imperative to make Kinara Capital possible and it has been a gratifying experience. Kinara Capital is now operating out of 12 offices across 3 states with plans to expand to 5 states in the upcoming year.
Please talk about the mission of Kinara Capital to pioneer access to capital for micro and small enterprises in India. I founded Kinara Capital with a clear mission to help MSME entrepreneurs gain financial access in India because traditional bank lenders routinely ignore them. There is a “Missing Middle” in India when it comes to lending. There are 30 million small businesses in India who contribute to over 45% of the national GDP and yet, only about 5% of these enterprises have access to capital. This is primarily due to the fact that banks tend to apply the same evaluation criteria to all businesses. Traditional banks are unwilling to make small ticket loans due to the perceived risk of small businesses especially without some form of collateral. Microfinance loans are capped at Rs.50K-Rs.1Lakh making them unsuitable for financing the growth and expansion of MSMEs. Informal lending through local loan sharks is unreliable they are notorious for charging 60-100% interest rates on their loans. In this market, we are desirable partners and a legitimate finance provider to MSME entrepreneurs. Kinara Capital provides debt capital in the range of Rs.1 to Rs. 15L to MSMEs in India for asset financing and working capital needs without requiring collateral. To date, Kinara Capital has funded 3000+ loans which has made a social impact of creating 2000+ BOP jobs in India; 44% of these jobs went to first-time job seekers and 25% to women. We have only just begun to address the Trillion Rupee market gap between microfinance and commercial capital.

Should businesses in India focus more on CSR activities for holistic development?
Yes. I think a convergence of for-profit and non-profit methodologies creates a more stable, successful economy. For years, businesses were driven only by financial ROI while fostering goodwill drove non-profit organizations. However, this meant a system where many corporations were not held accountable or required to give back to communities in their goal to make a profit. On the other hand, the non-profits primarily relied on donations and couldn’t ever compete with corporations to hire professionals to improve their operations. Social Businesses focuses on both the social and the financial ROI of an organization thus, creating a convergence of profit and purpose. Social Impact companies are the roots of CSR awareness and it is no surprise that in the last decade, we have seen many MNCs build their own CSR departments to emphasize workplace sustainability and community engagement. The more interconnected we are as a society, and as a world, chances are better that individuals and companies will push to make ethical choices and impactful decisions.  

What piece of advice would you like to give to the aspiring youth who wish to pursue their dream of becoming an entrepreneur?
So many entrepreneurs start with a solution at times without deep diving into the problem or make too many assumptions of how things will work. My advice to them is “Get out of the building.” Go meet customers, partners, vendors…and meet lots of them. Understand their challenges with an open mind. Don’t try to project your solutions too early. Just listen and learn first. When you think you have understood the problem and have possible solutions talk to your customers to validate if it will work. Any chance you can, “get out of the building” and in front of your customers.

According to you, what are the top three essential skills needed to be a successful entrepreneur?
It is always tough to narrow it down to a set of top three skills so I will say up front that a good attitude is a big part of success and how you will weather the tough times as an entrepreneur. Adding to that, here’s what I consider the “must-have” skills needed to be a successful entrepreneur:

  1. Perseverance- For my first seed round capital raise, I met with 200+ people to find 4 that agreed to fund me. It’s a journey for the “braveheart” – you will hear “No” 100x more then “Yes” as you try to venture out. Being able to withstand this day in and day out while staying positive and truly believing in what you are trying to achieve is the key to survival.
  2. Focus- All businesses go through unexpected challenges, or at times, you may have to alter your business model or practices. Staying focused on the big picture and on your vision is key to pushing through the day-to-day hurdles.
  3. People alignment- Align people who share your vision and your work style not your views/philosophy. My COO and I have completely different life experiences and probably have opposing viewpoints on most things. But we share a common vision of our company and most importantly have the same working style. As an entrepreneur, you must learn to appreciate the breadth of talent others can bring to fill the gaps and foster an environment where your team knows how to play well together, and at the same time not be afraid to cull those that are working against the objectives of the company.

 How do you manage the work-life balance?
To be honest, I don’t feel the need to compartmentalize my work and my life too much. My business challenges are continually on my mind whether I am cooking, gardening, traveling and probably even when I am sleeping! But when you are passionate about what you do and truly enjoy the process of building something as I am about my work at Kinara, I don’t feel that my work-life balance is out of sync.  

What are your views and opinions towards the ambiguous need to promote women entrepreneurship and women empowerment in India?
The need to promote women entrepreneurship is real. Women in India, especially in non-urban areas, are being left far behind when it comes to economic independence. A recent McKinsey report found that India could add up to $700 Billion to its GDP in the next decade if it can improve its gender imbalance in its workforce. Through Kinara Capital, we have helped several women-run MSMEs but honestly, there are not enough of them in the eco-system. Entrepreneurship is the ultimate leveler because if your company is selling quality products or services, your customers stop wondering if it is run by a man or a woman. A woman may face bias to earn a workplace promotion often at the mercy of an inherent sexist culture. However, as an entrepreneur, she is empowered to make her own decisions, hire a respectful team, and have the room to fail and to succeed. The need is not to provide concessions or give hand-outs to women, but to build a support eco-system made up of men and women that bolster the chances of success for women to push higher than even they may have dreamt of be it in their education, workplace or business. Only then can we create more role models for a whole new generation to fully realize the collective potential of women in India