Northern Arc Capital Raises $75 Million from FMO through Senior Secured Debentures

Bengaluru – June 25, 2024 – Northern Arc Capital Limited, one of the leading diversified non-banking financial companies (NBFC) in India, announces the issuance of senior secured, listed Non-Convertible Debentures (NCDs) amounting to up to $75 million (equivalent in INR 620 CR), taking their overall exposure of USD 125 Million. This significant transaction has been subscribed by FMO, the Dutch entrepreneurial development bank.

The NCDs will be listed on BSE Limited (BSE) and have a tenure of five years. The funds raised through this issuance will be strategically deployed in retail microloans, MSME loans, and green loans, reflecting Northern Arc’s commitment to fostering inclusive economic growth and environmental sustainability.

Ashish Mehrotra, Managing Director & CEO of Northern Arc Capital, remarked, “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. Our innovative platforms, such as nPOS and Nimbus, play a crucial role in this mission by ensuring seamless loan processing and effective debt management.”

Northern Arc Capital’s dedication to leveraging technology is exemplified in its proprietary platforms, nPOS and Nimbus. nPOS, a cloud-based API-enabled platform, streamlines loan processes for partnership and co-lending businesses, while Nimbus provides comprehensive end-to-end debt transaction management. These innovations support efficient loan processing and debt management, ensuring that Northern Arc can meet the diverse needs of its clients with data and technology. ”

Huib-Jan de Ruijter, Chief Investment Officer at FMO, stated, “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. We want to thank Northern Arc for our partnership, enhancing financial inclusiveness across India.

As Northern Arc Capital continues its journey, the focus remains on innovation, resilience, and inclusivity for economic empowerment and sustainability. The latest investment from FMO reaffirms Northern Arc’s vision of creating a financially inclusive future, driving meaningful impact across India’s diverse communities.