In its largest debt investment in India so far, US-based Calvert Impact Capital has invested $10 million in debt financing in debt platform Northern Arc Capital. The deal was conducted through External Commercial Borrowing (ECB).
Led by Dr. Kshama Fernandes, MD & CEO, Northern Arc (formerly known as IFMR Capital Finance Limited) is an NBFC that provides access to debt for under-banked individuals and businesses in India. Based in Chennai, the firm has enabled over $12 billion of financing to over 200 partner organizations through 140 reputed domestic and global investors since its inception.
Speaking about the financing, Bama Balakrishnan, COO, Northern Arc, said, “The partnership with Calvert Impact Capital is long-term and multi-dimensional, helping both organizations achieve common goals across impact and growth. These include aiding small businesses and promoting gender equity, a cause that is strongly endorsed by both organizations. The facility’s longer duration will expand Northern Arc’s ability to fund MSMEs and households.”
The capital will be leveraged by Northern Arc towards on-lending to financial institutions as well as lending directly to retail customers and to mid-market corporates.
Daniel Ford, Investment Officer, Calvert Impact Capital, said, “Northern Arc has been instrumental in strengthening Indian debt capital markets to the benefit of organizations serving under-banked populations. Today, more than ever, these companies and their clients benefit from access to a diversity of funding sources and the relationship-based approach of the Northern Arc model. As an investor, we benefit from leveraging the market and credit expertise of the Northern Arc team as we put capital to work for impact in India.”
