Northern Arc Secures USD 75 Mn Boost for Micro and Green Loans Projects The funds raised will be deployed in retail microloans, MSME loans, and green loan projects.
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Northern Arc Capital Limited, a non-banking financial company (NBFC), has secured USD 75 million via senior secured non-convertible debentures (NCDs) listed on the BSE, with a five-year duration, from the Dutch development bank FMO. With this deal, Northern Arc's exposure is increased to USD 125 million overall.
Ashish Mehrotra, Managing Director and CEO of Northern Arc Capital, said, "This substantial investment from FMO underscores our unwavering commitment to transforming the financial landscape for underserved individuals and businesses in India. By channelling these funds into microloans, SMEs, and green projects, we aim to create a cascading effect that promotes sustainable economic growth and financial inclusion. Our innovative platforms, such as nPOS and Nimbus, play a crucial role in this mission by ensuring seamless loan processing and effective debt management."
nPOS is a cloud-based API-enabled platform that streamlines loan processes for partnership and co-lending businesses, while Nimbus provides comprehensive end-to-end debt transaction management.
Huib-Jan de Ruijter, Chief Investment Officer at FMO, stated, "We are very pleased to be able to provide long-term funding for MFIs and NBFCs in India, which have limited access to term funding from capital markets. This local currency facility to Northern Arc supports entrepreneurship and innovation and encourages the formalisation and growth of SMEs and microenterprises. We want to thank Northern Arc for our partnership, enhancing financial inclusiveness across India."
In April, Northern Arc raised USD 80 million in capital, split equally between debt and equity components, from the International Finance Corporation (IFC), a World Bank Group member.
Northern Arc claims to handle an AUM of INR 10,081 crore. The firm is backed by equity investors like IFC, Sumitomo Mitsui Banking Corporation, LeapFrog, 360 ONE (formerly known as IIFL), Accion, Augusta Investments (known as Affirma Capital), Dvara Trust, and Eight Roads (proprietary arm of Fidelity).
