Northern Arc Capital Limited, a non-banking financial company (NBFC) in India, recently received USD 25 million in debt financing from the Dutch development bank Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO). The funding will enable Northern Arc to boost its support of institutions that serve micro-, small and medium-sized enterprises (MSMEs), particularly those owned by women. The service area includes both rural and urban regions of India.
FMO Chief Investment Officer Huib-Jan de Ruitjer stated, “Northern Arc acts as catalyst to NBFCs without effective access to capital markets.” It does this through offerings including loans, securitizations, guarantees and other credit enhancements.
Founded in 2008, Northern Arc’s mission is “to enable access to finance for the underbanked in an efficient, scalable and reliable manner.” During 2019, the firm facilitated INR 150 billion (USD 2.0 billion) in debt. As of September 2020, it reported total assets of INR 45 billion (USD 598 million). In addition to MSME finance, the organization is active in agricultural, corporate, housing and vehicle lending.
In addition to FMO, Northern Arc’s funders include the Philippines-based Asian Development Bank, US-based Calvert Impact Capital, Japan-based Sumitomo Mitsui Banking Corporation and the government-backed US International Development Finance Corporation.
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private sector institutions. The institution works towards the UN’s Sustainable Development Goals by funding capacity development and placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. During the year ending December 2020, FMO lost EUR 205 million (USD 245 million) on a total portfolio of EUR 12 billion (USD 14.3 billion).
By Sophie Fiala, Research Associate
Sources and Additional Resources
FMO press release
https://www.fmo.nl/news-detail/0814c2ee-9ea7-46d7-ba12-0258379c8ef6/northern-arc-raises-usd-25mln-in-debt-financing-from-fmo
FMO homepage
https://www.fmo.nl/
FMO 2020 Annual Report
https://annualreport.fmo.nl/2020/
Northern Arc homepage
https://www.northernarc.com/
Northern Arc Investor Updates
https://www.northernarc.com/investor
Northern Arc Annual Report 2019-2020
https://www.northernarc.com/assets/uploads/pdf/Annual-Report-2019-20-1605599349.pdf
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