Norther Arc Capital to raise USD 50 mn debt funding from DFC

Non-banking finance company (NBFC) Northern Arc Capital has received a commitment of USD 50 million (about Rs 375 crore) of debt financing from US International Development Finance Corporation (DFC). The funds will be used to support growth and liquidity needs of institutional clients as well as lend to small businesses and individuals, Northern Arc said in a release.

"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 COVID-19 pandemic and the resultant lockdown," Northern Arc CFO Bama Balakrishnan said. "These entities operate across the country's landscape serving nearly 50 million customers across 580 districts," Balakrishnan added.

The funds will be deployed to support women entrepreneurship and employment, food security and water, sanitation and hygiene, the company said. "We are especially proud that our financing will support loans that empower women, who are often disproportionately impacted by crisis like COVID-19, as well as expanded access to water, sanitation, and food, which are central to global health resilience," DFC's executive vice president (strategy) Edward A Burrier said.

Northern Arc Capital, formerly known as IFMR Capital Finance, is a pan-India debt platform that addresses the credit requirements of underbanked in the country. Till date, it has enabled debt financing of around Rs 83,000 crore for its clients across microfinance, small business finance, affordable housing finance, vehicle finance, agriculture finance and corporate finance verticals.

DFC is America's development bank which has partnered with companies across the world to address some of the critical challenges facing the developing world..