Northern Arc Capital Syndicates €10 Mn Debt Facility For Fusion Microfinance

The capital raised through Germany's BANK IM BISTUM ESSEN will be on-lent to support women borrowers, thereby furthering financial inclusion in rural India
Northern Arc Capital Syndicates €10 Mn Debt Facility For Fusion Microfinance
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Germany-based cooperative bank BANK IM BISTUM ESSEN (BIB) has concluded their first-ever debt funding in India in the form of an ECB transaction to Fusion Microfinance Private Limited, a leading NBFC MFI headquartered in New Delhi. BIB’s EUR 10 million funding to Fusion will provide systemic liquidity to Fusion and will be utilized to provide microloans to women borrowers from low-income households, increasing their access to finance and for the growth of their businesses.

"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. The transaction facilitated by Northern Arc Capital, a leading digital debt platform that addresses the credit requirements of the underbanked in India, took over a year to culminate with the global health crisis throwing up multiple challenges.” said Markus Christ, senior investment officer (Asia), BANK IM BISTUM ESSEN.

Fusion has a PAN India presence through 650 branches across 300 under-developed districts in 18 states of the country. It has an outstanding portfolio of INR 4,107 crore, as of December 31, 2020.                 

“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,” shared Devesh Sachdev, managing director and chief executive officer, Fusion Microfinance:

The facility, syndicated and executed by Northern Arc, is the latest in a series of transactions where 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.

“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,” added Bama Balakrishnan, chief operating officer, Northern Arc. 

Till March 31, 2021, Northern Arc has enabled around INR 95,000 crore of financing to its partner institutions through reputed domestic and global investors. Northern Arc’s exposure is spread across over 570 districts in 35 states and union territories in India, as on March 31, 2021. It is backed by marquee private equity players like Leapfrog, IIFL, Accion, Affirma Capital (erstwhile Standard Chartered Private Equity), Dvara Trust, Eight Roads, and Sumitumo Mitsui Banking Corporation.

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