Northern Arc Capital provides a bridge between debt capital markets and high-quality debt originators in India. By providing efficient and reliable access to debt for such lenders, the company is enabling a steady supply of finance for financially-excluded families and businesses in this emerging economy.

Since its inception in 2008, Northern Arc Capital, formerly IFMR Capital, has enabled debt financing using a variety of structures, such as direct loans, securitisation, guarantees, arrangement and placement of commercial paper, bonds, debentures, and other capital markets products, across sectors like microfinance, small business loans, affordable housing finance, vehicle finance and agri-finance.

Northern Arc’s platform in the financial services sector was set up primarily with the mission of catering to the diverse credit requirements of under-served households and businesses by providing efficient and reliable access to debt finance. Registered with the RBI as a systemically important, non-deposit taking non-banking finance company (“NBFC”), Northern Arc has been operating in the financial inclusion space for over a decade with a business model diversified across offerings, sectors, products, geographies and borrower segments.

The company’s focus is on providing access to credit to underserved households and businesses directly and indirectly through its Originator Partners. Their business model operates with a robust risk management framework that uses a combination of proprietary quantitative data analytics and qualitative field-level insights that aids credit assessment and monitoring.

LeapFrog invested in Northern Arc Capital (then called IFMR Capital) in 2014. Our investment has assisted the company on its rapid growth trajectory, expanding its customer base, broadening into new regions of India and deepening its access to a wider class of international investors.

Since our investment, we have partially sold down our stake in Northern Arc Capital in exits to IIFL Special Opportunities Fund, Standard Chartered Private Equity, Affirma Capital and Eight Roads Ventures, however we retain a shareholding and remain bullish about the future of this market innovator as it works to digitise its business and forge strategic alliances across new markets for further diversification.