Chennai based NBFC Northern Arc announced that it has received $50 million in debt financing from US International Development Finance Corporation (DFC). While he initial tranche of $25 million was invested in December, the additional $25 million was disbursed recently.

Founded in 2008, Northern Arc is a digital debt platform that caters to the under-banked individuals and businesses in India. The fresh capital will be used by the firm towards lending to financial institutions, as well as lending directly to retail customers through the co-lending product and to mid-market corporates.

Dev Jagadesan, Acting DFC Chief Executive, DFC, said, “Communities across the globe continue to face challenges in food security, sanitation, and financial inclusion - especially when it comes to rural and women-owned enterprises. DFC’s investment in Northern Arc represents an investment in women’s economic empowerment and sends a powerful message of US support for gender equality this women’s history month.”

“Northern Arc plays an important role in the Indian financial ecosystem by bringing underbanked businesses and households under the ambit of formal finance. A large proportion of these are women borrowers and entrepreneurs," said Northern Arc MD and CEO Kshama Fernandes. "A women-led organisation, the team strongly believes in diversity and the role women can play in generating positive outcomes for society and for the economy as a whole.”

over 40 percent of the funds deployment will be used by DFC to generate loans towards microfinance institutions (MFI), whose loans are primarily targeted towards women. The loans will play an important role in providing credit to under-banked households and small businesses, which have been worst hit due to the global pandemic crisis. The capital will also help high-quality non-banking financial companies (NBFC), early-stage businesses, and small and medium enterprises (SME) that have strong business models but are facing liquidity crunch.