Indian nonbank lender Northern Arc Capital has secured an undisclosed amount of investment from Japan’s Sumitomo Mitsui Banking (SMBC).
As a result, SMBC acquired a 5.4% equity interest in the company.
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The move will enable SMBC to make investments in transactions carried out by Northern Arc. It will also allow the Japanese bank to provide on-balance sheet lending to Northern Arc’s partners.
In turn, the partnership will support Northern Arc’s growth ambitions and bolster its profile among global investors.
Following the SMBC investment, Northern Arc has now raised a total of $140m in equity funding this year.
Northern Arc Capital managing director and CEO Kshama Fernandes said: “The investment by SMBC, one of the world’s largest financial services institutions, is a vote of confidence in Northern Arc’s business model, pioneering capabilities and corporate governance.
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By GlobalData“We hope to leverage on the potential synergies of this partnership to further our mission of financial inclusion and widen our impact on the livelihoods of under-banked individuals and businesses.”
Northern Arc Capital was established in 2008 is a non-banking finance company. It operates as a debt capital platform for underbanked individuals and businesses in India.
Till date, Northern Arc has enabled debt financing of nearly $10bn for financial institutions that offer credit services.
SMBC deputy president Masahiko Oshima said: “We are pleased to have Northern Arc Capital as our strategic partner in India, so as to provide a sustainable and differentiated approach to mandated lending in India, and deepen our commitment to investing in the country.
“This partnership will also allow us to contribute meaningfully towards women empowerment, financial inclusion for the underserved Indian population and the sustainability of the Indian economy.”
