Digital debt platform, Northern Arc has raised $50 million in debt financing from US International Development Finance Corporation (DFC); the initial $25 million being invested in December and the additional $25 million was disbursed recently.
Chennai based Northern Arc is a digital debt platform that caters to the under-banked individuals and businesses in India. The fresh capital will be used by the firm towards lending to financial institutions, as well as lending directly to retail customers through the co-lending product and to mid-market corporates.
Kshama Fernandes, MD & CEO, Northern Arc, said, “Northern Arc plays an important role in the Indian financial ecosystem by bringing under-banked businesses and households under the ambit of formal finance. A large proportion of these are women borrowers and entrepreneurs. A women-led organisation, the team strongly believes in diversity and the role women can play in generating positive outcomes for society and for the economy as a whole.”
Dev Jagadesan, Acting DFC Chief Executive, DFC, said, “Communities across the globe continue to face challenges in food security, sanitation, and financial inclusion - especially when it comes to rural and women-owned enterprises. DFC’s investment in Northern Arc represents an investment in women’s economic empowerment and sends a powerful message of US support for gender equality this women’s history month.”
The firm said in a statement that proceeds will help microfinance borrowers in both urban and rural areas, to whom credit has dried up over the last few months. Over 40 percent, i.e. Rs 150 crore of the fund will be used to generate loans towards microfinance institutions (MFI), whose loans are primarily targeted towards women.
