TheNFAPost Podcast
  • Funds to be utilised by Asirvad to address the liquidity shortage faced by women borrowers of lower income households
  • Since March 2020, Northern Arc Capital has raised a total of over Rs 1,000  crore in offshore funding
  • Asirvad  since March 2020 has raised a total of Rs 500 crore worth of debt through Northern Arc facilitated transactions

Chennai, NFAPost: Leading debt platform Northern Arc Capital on Monday announced that it is has arranged an External Commercial Borrowing (ECB) worth nearly Rs 220 crore (EUR 25 million) for Asirvad Microfinance, the highest rated Microfinance Institution in the country.

The ECB was subscribed by Germany-based social impact fund, Invest in Visions GmbH. Invest in Visions was advised on the transaction by impact-focused investment manager, Agents for Impact GmbH (“AfI”).

The funds will be disbursed to Asirvad in three stages of which EUR 5 million has already been disbursed. It will be utilised by Asirvad to address the liquidity shortage faced by women borrowers from lower income households.

Northern Arc has played a critical role during these challenging times in helping microfinance entities raise much-needed liquidity from reputed DFIs from across the world. The firm has also been instrumental in syndicating funds from domestic financial institutions under various regulatory schemes like TLTRO, PCG etc. and other special liquidity and refinancing schemes. 

In the last 5 months, Northern Arc has facilitated a total of Rs 500 crore worth of loans for Asrivad from a wide range of investors including PSU banks, multinational banks, SFBs domestic and international DFIs.

Northern Arc Capital Chief Operating Officer Bama Balakrishnan said, “This transaction is a testament to Northern Arc’s ability to add value to clients even during the toughest of times. Some of the largest financial institutions in the country benefit from our product structuring expertise and wide investor network.”

“We have been working extensively with Asirvad during the crisis and this deal is the cherry on the cake, providing longer term reputational and access benefits apart from longer term liquidity,” Bama added.

Asirvad till date has disbursed over Rs 20,000 crore to over 1.5 crore customers from low income segments of India. Asirvad’s credibility in the market and strong track record has enabled the company diversify its borrowing profile and raise significant liabilities over the last 5 months under various schemes (TLTRO, PCG etc) announced by the Ministry of Finance. The latest debt raise from a global investor will further strengthen its liabilities strategically.

Asirvad MFI MD and CEO Raja Vaidyanathan said, “We are grateful for the support we have received from Invest in Visions and Northern Arc on this transaction. These funds will help Asirvad in furthering our mission of creating an inclusive India, by extending credit to the micro-borrowers. As India continues to weather the unprecedented COVID-19 pandemic, Asirvad’s main focus will be to empower women in the under-served regions.”

Impact Chief Executive Officer of Agents Andrij Fetsun said, “From the get go, we were confident in recommending this funding to Invest in Visions, having analysed and researched on Asirvad and finding that they have the key competitive advantage of being an AA rated MFI in India, with a sound track record in microfinance and a strong and diversified portfolio.”

Since inception, Northern Arc has enabled over $11 billion of financing and structured over 750 rated transactions – across 200 high quality partner institutions through 140 reputed domestic and global investors. Northern Arcs exposure is spread across 580 districts in 28 states and 6 union territories in India. It is currently instrumental in positively impacting the lives of over 57 million people in India. It is backed by marquee private equity players like Leapfrog, IIFL, Eight Roads, Accion, Affirma Capital (erstwhile Standard Chartered Private Equity), Dvara Trust and Sumitumo Mitsui Banking Corporation.

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