India: ADB, Northern Arc Sign USD 40 Million Loan to Support Microfinance Borrow...
India, December, 21 2020 -
Northern Arc Capital Limited will on-lend the loan proceeds and provide guarantees to financial institutions and individual borrowers. It will also on-lend to affordable housing finance companies, ADB said in a statement.
The Asian Development Bank on Monday said it has signed a USD 40 million loan to Northern Arc Capital Limited (NACL) to support the livelihoods of microfinance borrowers and MSMEs in India.
The loan is disbursed to NACL as part of ADB's ongoing COVID-19 response.
NACL will on-lend the loan proceeds and provide guarantees to financial institutions and individual borrowers.
NACL will also on-lend to affordable housing finance companies, ADB said in a statement.
"The pandemic has had a deep impact on the country's informal economy, especially among microfinance borrowers and MSMEs.
NACL's unique business model of working with the most impacted segment of MSMEs and financial institutions makes them an ideal partner," said ADB's Private Sector Operations Department Director Christine Engstrom.
This project will provide additional support for the Government of India's ongoing efforts to kickstart credit flow to this segment of the economy, Engstrom added.
NACL connects NBFCs, microfinance institutions and housing finance companies to mainstream financers for debt fundraising through a variety of products, such as partial risk guarantees for capital markets issuances, multi-originator securitisation, and pooled loan/bond issuance, the release said.
"This enables smaller and mid-sized NBFCs to deepen their presence and improve access to financial services to millions of financially excluded households in India," it said, added, its innovative solutions have enabled around 250 partners, serving nearly 60 million customers across 680 districts across India, access funding from reputable investors.