Northern Arc, a non-banking financial company in India, has raised $80 million from the International Finance Corporation (IFC), a member of the World Bank Group.
The investment comprises an equal split of equity and debt, each contributing $40 million, it said in a statement.
DealStreetAsia had first written about the development in February.
The announcement comes within a week of Dutch development bank FMO’s disclosure that it would invest $75 million in the NBFC.
Incorporated in 2008, Northern Arc provides debt access to under-banked individuals and businesses in India. It provides microfinance, commercial vehicle finance, affordable housing finance, agri finance, and loans against property, among others.
Northern Arc plans to use the funding to widen its reach to end customers, thereby fostering social impact through improved credit access to customers across its focused sectors.
“Financial inclusion is crucial for eradicating poverty and fostering prosperity. IFC continues to work with private sector partners to enhance access to finance for underserved communities, especially retail-level women-led MSMEs,” said Wendy Werner, IFC India Country Head, in a statement.
“Our partnership with Northern Arc is a key component of our strategy to harness private sector expertise and finance in reaching millions of MSMEs and mid-market companies through innovative products,” she added.
As of September 30, 2023, Northern Arc claims to have facilitated financing of over Rs 1.5 trillion in credit through its technology platform to people in India.
Northern Arc handles an AUM of Rs 10,081 crore. The firm is backed by equity investors like Sumitomo Mitsui Banking Corporation, LeapFrog, 360 ONE (formerly known as IIFL), Accion, Augusta Investments (known as Affirma Capital), Dvara Trust, and Eight Roads (a proprietary arm of Fidelity).
