Northern Arc Capital, a non-banking finance company (NBFC) that provides access to debt capital for under-banked individuals and businesses, announced that it has raised $10 million in debt through external commercial borrowing (ECB) from US-based impact investor Calvert Impact Capital.

The funding is Calvert Impact Capital’s largest debt investment in India so far.

In a press release, Northern Arc said that it will deploy the funds towards on-lending to financial institutions as well as lending directly to retail customers and to mid-market corporates.

“Underbanked customers, including low-income households and small businesses, to whom credit has dried up over the last few months due to the pandemic, will be key beneficiaries of the proceeds,” the NBFC added.

“The partnership with Calvert Impact Capital is long-term and multi-dimensional, helping both organisations achieve common goals across impact and growth,” Bama Balakrishnan, COO of Northern Arc said in the release, adding, “The facility’s longer duration will expand Northern Arc’s ability to fund MSMEs and households.”

Calvert Impact Capital’s portfolio serves sectors, geographies, and populations that are often overlooked or underserved by the traditional capital markets.

“As an investor, we benefit from leveraging the market and credit expertise of the Northern Arc team as we put capital to work for impact in India,” Daniel Ford, Investment Officer of Calvert Impact Capital was quoted in the release as saying.

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