Money & Banking

Northern Arc structures and executes Nabsamruddhi Finance’s first PLI investment

Our Bureau Chennai | Updated on October 12, 2020 Published on October 12, 2020

The transaction will shore up liquidity for five NBFCs and increase disbursements to lower-income households

Northern Arc Capital, a leading debt financing platform, announced on Monday that it has successfully structured and executed the first Pooled Loan Issuance (PLI) investment of Nabsamruddhi Finance worth ₹50 crore to five non-banking financial companies (NBFCs).

Nabsamruddhi is a subsidiary of the National Bank for Agriculture and Rural Development (NABARD), an apex development finance institution.

In a press release, Northern Arc said through this PLI, Nabsamruddhi enabled debt for five leading NBFCs — Satya MicroCapital, Sonata Microfinance, Kinara Capital, IntelleGrow and Berar Finance, which operate in microfinance, SME finance and vehicle finance segments.

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Liquidity boost

Northern Arc acted as the guarantor in this transaction, leading to a 3 notch upgrade to “A-” category. The capital will be utilised by the five NBFCs to on-lend to under-banked households, small enterprises and purchasers of vehicles.

“The transaction will provide five strong NBFCs across sectors much-needed capital to shore up their liquidity and increase fresh disbursements to lower income households and small businesses,” PVS Suryakumar, Chairman, Nabsamruddhi Finance, was quoted in the statement.

The PLI product developed and pioneered by Northern Arc pools together a set of loans by an investor to diverse entities. Till date, the firm has executed 35 Pooled Issuance transactions and has raised ₹2,500 crore for its clients through the product.

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“The fundamental purpose of Northern Arc’s innovative and customised structured product solutions is to enable impact institutions like Nabsamruddhi take exposure to emerging NBFCs with strong business models and social goals,” Northern Arc MD & CEO, Kshama Fernandes, was quoted as saying.

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Published on October 12, 2020
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