ADB extends $40m loan to Indian digital debt platform Northern Arc

Aye Finance provides loans to small businesses. Photo: Aye website

The Asian Development Bank (ADB) has extended a $40 million loan to Northern Arc Capital Limited (NACL) to support the livelihoods of microfinance borrowers and MSMEs in India.

The loan has been disbursed to NACL as part of ADB’s ongoing COVID-19 response, it said in a statement on Monday.

NACL will on-lend the loan proceeds and provide guarantees to financial institutions and individual borrowers. Besides, it will also on-lend to affordable housing finance companies, the statement added.

“The pandemic has had a deep impact on the country’s informal economy, especially among microfinance borrowers and MSMEs. This project will provide additional support for the Government of India’s ongoing efforts to kickstart credit flow to this segment of the economy,” said ADB’s private sector operations department director Christine Engstrom.

“The funding will help us design new debt product solutions for clients. We will also utilise the investment as a catalyst to attract other investors into transactions that we structure and execute,” NACL chief operating officer Bama Balakrishnan added.

NACL is a digital debt platform that connects NBFCs, microfinance institutions, and housing finance companies to mainstream financers for debt fundraising through a variety of products, such as partial risk guarantees for capital markets issuances, multi-originator securitization, and pooled loan/bond issuance. It claims to have enabled around 250 partners, serving nearly 60 million customers across 680 districts in India, access funding from investors.

The firm had earlier received investment from the US International Development Finance Corporation (DFC).

In September, NACL facilitated external commercial borrowing (ECB) worth $29.74 million (close to Rs220 crore) for Asirvad Microfinance, a subsidiary of Manappuram Finance Ltd. In January, it had also participated in agtech startup WayCool’s $17-million funding round.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.