FMO Invests $50 Million In Northern Arc

Updated on: 29 October 2022 12:18 am

The UK-based investment fund has invested $10 million in the finance company, taking its shareholding to 16.6 per cent from the earlier 14.4 per cent

Muthoot Microfin bags $10 million from Greater Pacific Capital Photo: The UK-based investment fund has invested $10 million in the finance company, taking its shareholding to 16.6 per cent from the earlier 14.4 per cent

The Dutch entrepreneurial development bank FMO has invested $50 million through the issue of non-convertible debentures (NCD) in the IPO-bound debt financier Northern Arc.

The latter claimed it would use half of the funds to provide financial assistance to micro, small and medium enterprises (MSMEs) and women entrepreneurs in India. The rest would be used to address three critical UN sustainable goals; Decent Work and Economic Growth (SDG 8), Gender Equality (SDG 5) and Reduced Inequality (SDG 10).

“As a pioneer in the space we work in, we have become the preferred port of call for many global DFIs. We are excited to expand this partnership with FMO to cater to the diverse financial requirements of India’s small entrepreneurs and emerging segments,” said Ashish Mehrotra, MD, and chief executive officer of Northern Arc Capital.

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Hujib-John de Ruijter, CIO at FMO added that FMO is ready to support business development across India through the association with Northern Arc.

Founded in 2019, Chennai-based Northern Arc is known for disbursing loans to households, MSMEs, start-ups, and multiple financial institutions. According to its audit report, the start-up earned Rs 917 crore in the financial year (FY) 2022, which is up from Rs 684 crore in FY 2021 and Rs 634 crore in FY 2020. The firm also reported significant growth in its PAT (Profit After Tax) numbers. In the current financial year, the firm earned Rs 182 crore as PAT in comparison with Rs 77 crore in FY 2021 and Rs103 crore in FY 103.

Present in 28 provinces and 7 union territories in India, Northern Arc has over Rs 9000 crore of Assets Under Management (AUM). Earlier it raised funds from major international companies like the United States Development Finance Corporation (USDFC), Proparco and ADB.