Northern Arc Capital, a platform in the financial services sector, on Wednesday said it has raised ₹100 crore debt from Japan’s Sumitomo Mitsui Banking Corporation (SMBC).
SMBC is Japan’s second-largest and the world’s fourteenth-largest bank by assets, with a presence in over 41 markets globally. This investment is a complementary move supporting the bank’s efforts in furthering its sustainable development goals in India.
Northern Arc Capital, which is a diversified NBFC, will use the proceeds to cater to the credit demands of small enterprises and agri-businesses. The transaction aligns with the company’s environmental, social and corporate governance (ESG) goal of creating sustainable impact by providing efficient and reliable debt finance to under-served businesses.
Since 2009, Northern Arc Capital has enabled financing for its credit originator partners who have impacted over 54 million lives across India. Since the onset of the covid pandemic, the debt platform has raised funds from reputed international investors including Japan International Cooperation Agency, USDFC, and Asian Development Bank.
SMBC India’s chief executive officer Toshitake Funaki said, “We are pleased that our strategic partnership with Northern Arc Capital has evolved and deepened amid the rapidly changing environment and over the years, supported SMBC in contributing positively to the attainment of SDGs in India.”
Northern Arc has cumulatively raised over ₹950 billion in funds for its clients since the inception of its platform in 2009. It is backed by private equity funds such as LeapFrog, IIFL, Accion, Augusta Investments (known as Affirma Capital), Dvara Trust, Eight Roads and Sumitomo Mitsui.
Kshama Fernandes, MD & CEO of Northern Arc Capital said, “We are excited to deepen our partnership and engagement with one of the world’s premier banking institutions. This transaction will further deepen Northern Arc’s foray into retail lending through partnerships.”
