24 Good Businesses 2012

Small is beautiful

Kinara Capital provides small ticket loans to enterprising SMEs that lack access to formal bank credit


KM Rajendra began working at Namaste Exports in 1989 when he was just 13. “I worked for₹150 a month as I had no other option since I had lost my parents quite early,” he recalls. Over the years, he moved up the ladder to emerge as a team leader of self-help group Ashraya, run by well-known social entrepreneur Neelam Chibber. But the urge to run an independent enterprise kept getting stronger. Today, the 34-year-old is the proud owner of leather company VK Designs, which he runs from a rented unit in Bengaluru’s Koramangala. He has 23 employees and clocks a turnover of₹3.5 lakh every month. “I have achieved all this because I got an unsecured loan of ₹3 lakh at the right time,” says Rajendra.

Similarly, Ashok Kumar, who supplies bags made from banana rope to an Ikea vendor (Ramesh Flowers) in Bengaluru, needed working capital to buy banana bark. Despite being an account holder with ICICI Bank, he could not get a loan because he did not meet the bank’s lending criteria. “I had started off in 2010 by investing ₹3 lakh of my own money, but I needed to invest in buying bark. I finally got a loan of ₹3.5 lakh, which helped me keep my business running,” says the 47-year-old founder of Harita Enterprises. Kumar’s business currently earns ₹2 lakh a month.

Then there’s R Ramesh Kumar, who runs an auto ancillary unit, Sigma CNC Products, at Hosur in Tamil Nadu. Although Sigma has an annual turnover of ₹2 crore, the firm has a perennial need for working capital since the business needs a ready inventory of steel and aluminium rods. “Even though I have an overdraft facility at the bank, the documentation and time taken by them to increase the limit is too much. I can’t afford to sit on an order. I have to ensure a faster turnaround,” points out Kumar, who finally got ₹5 lakh as working capital within four days. Once he repaid that, he got another ₹6 lakh as working capital loan and a further ₹2.5 lakh term loan to purchase a profile projector.

The common thread that links these three entrepreneurs is a relatively new non-banking finance company


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