Northern Arc Capital secures $75M from FMO via senior NCDs on BSE

Non-banking financial company (NBFC) Northern Arc Capital Limited has secured $75 million from Dutch development bank FMO through senior secured non-convertible debentures (NCDs) listed on BSE, with a five-year tenure.

This transaction boosts Northern Arc's total exposure from FMO to $125 million.

"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," Ashish Mehrotra, Managing Director and CEO of Northern Arc Capital, said in a statement.

"Our innovative platforms, such as nPOS and Nimbus, play a crucial role in this mission by ensuring seamless loan processing and effective debt management," he added.

nPOS is a cloud-based API-enabled platform that streamlines loan processes for partnership and co-lending businesses, while Nimbus provides end-to-end debt transaction management.

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"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," FMO's Chief Investment Officer Huib-Jan de Ruijter said.

In April, Northern Arc secured $80 million in funding from the International Finance Corporation (IFC), a member of the World Bank Group, in equal halves of debt and equity components.

Northern Arc handles assets under management of Rs 10,081 crore. The firm is backed by equity investors including Sumitomo Mitsui Banking Corporation, LeapFrog, 360 ONE (formerly known as IIFL), Accion, Augusta Investments (known as Affirma Capital), Dvara Trust, and Eight Roads (a proprietary arm of Fidelity).