With almost 20% women ownership in India’s Micro, Small and Medium Enterprises (MSME) sector, there is high demand for women-oriented loan products to address the skewed representation of gender equality in the industry, believes Kinara Capital CEO Hardika Shah , one of the leading ladies striving for gender inclusion in the fintech sector.
The United Nations says that almost 90% of a woman’s income is spent on her family’s well-being, which also resonates with the theme of International Women’s Day 2024: “Investing in Women: Accelerating Progress.”
With her non-banking financial company (NBFC), Shah is trying to kill two birds with one stone: first, to set an example in the fintech world by leading a female-majority management team, and second, by contributing to the growth of women-owned companies. MSMEs.
As we celebrate International Women’s Day 2024, here is the gist of her journey from a management consultant to starting Kinara Capital NBFC in India as we understand the importance of NBFCs for women in the MSME sector.
How does the NBFC boost the participation of women in MSMEs?
The NBFC provides unsecured business loans to micro-enterprises from across sectors. “Women-owned businesses make up almost 12% of our client portfolio. Under our HerVikas program for women entrepreneurs, we have disbursed ₹700 crore in discounted collateral-free business loans to women MSMEs leading to job creation and income generation,” says Hardika Shah.
Highlighting the low percentage of women owning property in India, Hardika Shah recommended that unsecured loans can be a tool to ensure the financial inclusion of women.
“When women entrepreneurs are supported with unsecured loans, they can improve their operations and strengthen the finances of their businesses, reaching their full potential,” noted Shah, explaining Kinara Capital’s women-oriented loan program, HerVikas.
The initiative led to a cumulative post-loan net income generation of over ₹187 crore from the women-owned MIMEs. The growth also translated into 31,000 jobs being supported in local economies. Women who are the beneficiaries of Kinara Capital’s ‘HerVikas’ program are seen as role models in their communities, said Hardika Shah.
Challenging the male-dominated fintech industry
Apart from HerVikas programme, the NBFC is also focusing on tapping the large credit gap in the MSME ecosystem and expansion plans for a wider reach, a goal that is set by a large number of NBFCs in the market. Ten years ago, these goals were nowhere near the sight for Shah, who had to overcome gender bias and skepticism in the workplace.
Sharing some of her encounters with business partners during the initial days of Kinara Capital, Shah said, “There were instances when potential partners looked right past me and only approached Thiru (Thirunavukkarasu R), our chief operating officer. I was met with skepticism, with many suggesting that I build an NGO or spend time with a social enterprise instead of taking on the challenge of building a last-mile lending company.”
Shah’s mantra for success
The transition from working at a high-paying Silicon Valley company to being an NBFC founder in India was motivated by Shah’s basic principle: “Don’t prepare for plan B, just focus on Plan A”.
“My mantra was ‘Don’t Plan for Plan B, Focus on Plan A.’ Until every possibility has been explored, don’t give up when you’ve decided to enter the entrepreneurial fray. Spending too much time thinking about a safety net doesn’t help you build your vision and focus on what you need to do,” noted Shah.
Gender inclusion at Kinara
Throughout Kinara Capital’s journey, Shah has never let her focus shift from an approach that defies the status quo. Talking about gender inclusion at his office in Bengaluru, Shah said, “We have achieved 50/50 gender parity along with inclusion of the LGBTQ+ community. Every year, increasing women employees in the workplace is an important step we are taking towards diversity and inclusion. “
The company’s management team is led by women in key positions such as CEO, CFO and CRO. “Long before it was a requirement, we have always had women representation on our board of directors (BoD). Today, a third of our BoD is women, including a woman Independent Director,” noted Shah.
A significant reduction in the female attrition rate from 17% in FY22 to FY23 is one of the milestones achieved by the company towards its commitment to diversity and inclusion in the workplace.
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Published: 07 Mar 2024, 14:50 IST