Northern Arc syndicates Rs 88 crore debt facility to Fusion Microfinance from Germany’s BIB

By: |
May 18, 2021 3:15 AM

The funding will help Delhi-based Fusion Microfinance, a leading NBFC-MFI, further financial inclusion in rural India and play a critical role in alleviating the economic and social impact of the Covid-19 pandemic’s second wave.

Markus said the transaction took over a year to culminate with the global health crisis throwing up multiple challenges.Markus said the transaction took over a year to culminate with the global health crisis throwing up multiple challenges.

Northern Arc Capital, the Chennai-based digital debt platform, has executed an ECB transaction worth euro 10 million (around Rs 88 crore) for Fusion Microfinance from Bank IM Bistum Essen (BIB), a German cooperative bank. This is BIB’s first-ever debt funding in India.

The funding will help Delhi-based Fusion Microfinance, a leading NBFC-MFI, further financial inclusion in rural India and play a critical role in alleviating the economic and social impact of the Covid-19 pandemic’s second wave.

Markus Christ, senior investment officer (Asia) at BIB, said, “We are extremely delighted to have partnered in our first transaction in India with Fusion Microfinance with the support of Northern Arc Capital. We believe that especially in these turbulent times, it is more important than ever to show a strong commitment and support to the underprivileged women entrepreneurs active in the rural areas of the country.

With these funds provided, we look forward to contributing to women with economic opportunities to transform the quality of their lives.”

Markus said the transaction took over a year to culminate with the global health crisis throwing up multiple challenges.

Devesh Sachdev, MD & CEO of Fusion Microfinance, said, “This is a very happy moment for us on two counts — it’s the beginning of our relationship with a very esteemed organisation like BIB, and this being our very first ECB transaction, it opens a new channel of funding for us in the midst of a challenging environment.

This will enable us to extend further support to our women clients who are facing extremely difficult challenges due to the ongoing pandemic.”

The facility executed by Northern Arc is the latest in a series of transactions in which the company has used its extensive relationships with global DFIs to facilitate debt funding in its sectors. Since the onset of the pandemic, the company had raised debt for its own balance sheet or its partners from US DFC, ADB, FMO, Calvert Impact Capital, Blue Orchard and CDC.

Bama Balakrishnan, COO, Northern Arc, said, “Northern Arc is excited to have played an important role in this landmark transaction. This was the first ECB borrowing for Fusion and the first debt transaction for BIB in India. It is a typical example of our work, showcasing our capabilities of introducing new investors to our sectors and enabling funding for our partners through new products.”

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