Northern Arc has raised US$50million of debt financing from US International Development Finance Corporation (DFC). This is one amongst the first major facilities sanctioned by global development financial institutions to the NBFC sector post the onset of the Covid-19 pandemic and the ensuing lockdown in India.
Northern Arc will be using this fund to support the growth and liquidity it needs for its institutional clients as well as lend to small businesses and individuals. It will be deployed to support women entrepreneurship & employment, food security and Water, Sanitation & Hygiene. DFC is America’s development bank and one of the world’s leading impact investors, partnering with companies across the world to address some of the critical challenges facing the developing world.
Bama Balakrishnan, CFO of Northern Arc said, “Northern Arc and DFC are natural partners in the effort to serve the underbanked and promote women entrepreneurship. Northern Arc itself has a large representation of women in senior management roles and has actively advocated equal opportunities for women and a greater role in the financial services sector. The transaction will allow us to support small and mid-sized NBFCs that are unable to attract debt funding from investors, especially after the onset of the Covid19 pandemic and the resultant lockdown. These entities operate across India’s landscape serving nearly 50 million customers across 580 districts. “
“DFC is proud to extend financing to Northern Arc and looks forward to working together to expand financial services to underbanked communities across India,” said Edward A. Burrier, DFC Executive Vice President, Strategy. “The role of Northern Arc takes on added importance in the wake of COVID-19, which around the globe is disrupting access to capital that individuals, families, and businesses so desperately need. We are especially proud that our financing will support loans that empower women, who are often disproportionately impacted by crises like COVID-19, as well as expanded access to water, sanitation, and food, which are central to global health resilience.”