Chennai-based debt platform Northern Arc Capital on Tuesday proclaimed it has raised $ 50 million in external commercial borrowing (ECB) from Japanese International Cooperation Agency (JICA). JICA is Japan’s governmental agency that works towards promoting economic and social growth in developing countries. This is one of the first private segment investments by JICA, focused on Indian financial inclusion for women.
Northern Arc will use the proceeds to cater to the credit demands of women borrowers or towards products that disproportionately benefit women. Coming in the backdrop of Covid-19, the transaction is likely to alleviate the social and economic impact of the pandemic. Northern Arc would offer loans through co-financing with the United States International Development Finance Corporation (USDFC) based on the facility for accelerating financial inclusion in Asia (FAIA), announced on March 27, 2020.
Keiichiro Nakazawa, senior VP of JICA, stated, “Northern Arc Capital is a unique and important financial institution that supports funding of the Indian NBFC sector, which plays a key role in promoting financial inclusion in India. We expect more Indian women to have access to financial services through this partnership with Northern Arc. Also, we are delighted that this loan is our first co-financing with USDFC in India.”
Since the onset of the Covid pandemic, the debt platform has raised funds from reputed international investors including USDFC, ADB, FMO and Calvert Impact Capital.
Kshama Fernandes, MD & CEO of Northern Arc Capital, stated, “This transaction is proof of Northern Arc’s ability to forge partnerships with and attract funding from reputed global DFIs. We are excited to partner with JICA to further our mission of catering to the diverse credit requirements of underserved households and businesses. The usage of proceeds will be towards promoting women entrepreneurship and employment, an important target area for the company.”