Northern Arc Capital, an Indian firm that facilitates funding flows between investors and retail lenders, recently borrowed INR 400 million (USD 5.5 million) from Kotak Mahindra Bank, a commercial bank also based in India. The transaction is partly guaranteed by two US-based institutions, the Rockefeller Foundation and the Michael and Susan Dell Foundation. The funds are slated for on-lending to microentrepreneurs and households with incomes averaging less than INR 25,000 (USD 340) per month, particularly those that have been more significantly impacted by the COVID-19 pandemic.
Founded in 2008, Northern Arc Capital is a non-banking finance company based in India with a debt portfolio spanning 29 states. Formerly known as IFMR Capital Finance Limited, its mission is “to enable access to finance for the underbanked in an efficient, scalable and reliable manner.” It does this by arranging funding for financial institutions active in agriculture, housing and gold loans through mechanisms such as direct loans, structured finance, fund management and capital market instruments. As of March 2020, its assets totaled INR 44.8 billion (USD 615 million).
Founded in 1985, Kotak Mahindra Bank is a commercial bank based in India with approximately 23 million active customers and 1,600 branches in the country. As of March 2020, its assets totaled INR 4.43 trillion (USD 60.8 billion), and it generated return on average assets of 2.1 percent and return on equity of 13.7 percent during the previous year.
Founded in 1999, the Michael and Susan Dell Foundation works in India, South Africa and the United States in the fields of education, economic stability and health. During the 2019 fiscal year, its charitable disbursements totaled USD 143 million.
Founded in 1913, the Rockefeller Foundation focuses on improved access to economic opportunities, electricity, food and healthcare. As of December 2019, it held total assets of USD 4.9 billion, having distributed approximately USD 150 million in grants during the calendar year.
By Teo Lin-Bianco, Research Associate
Sources and Additional Resources
Rockefeller Foundation press release
https://www.rockefellerfoundation.org/news/northern-arc-raises-inr-40-crore-debt-from-kotak-mahindra-bank-to-support-pandemic-hit-msmes-and-micro-entrepreneurs/
Northern Arc homepage
https://www.northernarc.com/
Northern Arc annual report 2019-20
https://www.northernarc.com/assets/uploads/pdf/NorthernARC-AnnualReport-2019-20-1619512175.pdf
Kotak Mahindra Bank homepage
https://www.kotak.com/en.html
Kotak Mahindra Bank annual report 2019-20
https://www.kotak.com/content/dam/Kotak/investor-relation/Financial-Result/Annual-Reports/FY-2020/kotak-mahindra-bank/Kotak_Mahindra_Bank_Limited_FY20.pdf
Michael and Susan Dell Foundation homepage
https://www.dell.org/
Michael and Susan Dell Foundation financial filing
https://www.dell.org/wp-content/uploads/2020/12/2019-Form-990-PF-for-MSDF-Website-Copy.pdf
Rockefeller Foundation homepage
https://www.rockefellerfoundation.org/
Rockefeller Foundation financial statements 2018-2019
https://www.rockefellerfoundation.org/wp-content/uploads/2020/09/The-Rockefeller-Foundation-2019-AFS.pdf
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