Northern Arc Capital Limited, a diversified non-banking financial company (NBFC) in India, has successfully raised $75 million (INR 620 crore) through the issuance of senior secured, listed Non-Convertible Debentures (NCDs). This substantial investment comes from FMO, the Dutch entrepreneurial development bank, increasing their overall exposure to Northern Arc to USD 125 million.
The NCDs, which will be listed on BSE Limited (BSE), have a tenure of five years. The capital raised will be strategically allocated to retail microloans, MSME loans, and green loans, reinforcing Northern Arc’s commitment to inclusive economic growth and environmental sustainability.
Ashish Mehrotra, Managing Director & CEO of Northern Arc Capital, commented on the transaction, saying, “This substantial investment from FMO underscores our unwavering commitment to transforming the financial landscape for under-served 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.”
Northern Arc Capital’s focus on leveraging technology is demonstrated through its proprietary platforms, nPOS and Nimbus. The nPOS platform, a cloud-based API-enabled solution, streamlines loan processes for partnership and co-lending businesses. Nimbus, on the other hand, provides comprehensive end-to-end debt transaction management, facilitating efficient loan processing and debt management to meet the diverse needs of Northern Arc’s clients.
Huib-Jan de Ruijter, Chief Investment Officer at FMO, expressed satisfaction with the partnership, stating, “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 formalization and growth of SMEs and microenterprises.”
