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Market-bound Northern Arc Capital partners with Dutch entrepreneurial development bank FMO
Photo Credit: VCCircle

Debt financing platform Northern Arc Capital, which filed for an initial public offering (IPO) this year, has partnered with Dutch entrepreneurial development bank FMO, the company said in a statement on Thursday.    

In this partnership, Northern Arc Capital will support FMO by providing services including research on macro trends, assessment of the financial landscape, transaction monitoring, performance reporting, and modelling support for securitisation of transactions in sub-Saharan Africa and countries neighbouring Europe, for all transactions guaranteed by FMO under the NASIRA programme.   

NASIRA is a risk-sharing facility provided by FMO for local financial institutions lending to underserved segments. The programme aims to allow local financial institutions to provide loans to young women and COVID-19-affected and migrant entrepreneurs, who financial institutions normally would perceive as too risky.   

“This exciting partnership with FMO marks our first step towards our global advisory footprint. We are pleased that our expertise on structuring, due diligence, and data modelling under the flagship NASIRA program will facilitate financial access to small businesses and women, helping them uplift their livelihoods, households and communities in Africa and the Sub-Saharan European neighbourhood,” Bama Balakrishnan, chief operating office at Northern Arc Capital, said in the statement.   

Northern Arc Capital (formerly known as IFMR Capital Finance) is a digital debt platform that caters to the under-banked in the Indian financial services sector. It was set up primarily to provide access to debt capital to meet the diverse credit requirements of under-served households and businesses.    

The Chennai-based lender had filed its Draft Red Herring Prospectus (DRHP) with the market regulator the Securities and Exchange Board of India  (Sebi) to raise funds through an initial public offering (IPO).    

The company will issue fresh equity shares of up to Rs 300 crore and an offer for sale (OFS) of up to 36.52 million equity shares by existing shareholders and promoters.   

In June, Northern Arc launched an alternative investment platform AltiFi for individual investors. The platform targets to bridge the gap in access to alternative investment assets, and enable individual investors to make direct debt investments.   

In April, it received Rs 40 crore debt financing from mid-sized private-sector lender Kotak Mahindra Bank to support pandemic-hit micro-entrepreneurs and micro, small and medium enterprises (MSMEs).    

In May, Northern Arc Capital and other lenders invested Rs 165 crore debt funding in credit and payment startup Slice during FY21.    

It also backed payments and financial services startup BharatPe with Rs 200 crore ($27 million) in its seventh round of debt financing with the participation of IIFL Wealth.

As of March-end 2021, the NBFC had enabled the financing of around Rs 95,000 crore for its clients.    

Over 140 players (banks, asset managers, insurance companies, DFIs, etc.) have invested in transactions structured and arranged by Northern Arc Capital.   It manages over Rs 2,000 crore ($300 million) in commitments.

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