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The Chennai-based financial services firm offers credit and loans to households and small businesses underserved by traditional banks in India. With a new dedicated climate debt fund, Northern Arc is adding green loans to its mix of mortgage, vehicle and agri-supply chain financing.
“For net zero to become a reality, there is a need to fund climate-focused small businesses to promote sustainable practices at the grassroots level,” said Northern Arc’s Bhavdeep Bhatt. The fund will provide loans to growth-stage companies in agriculture, solar energy, green building, energy efficiency, circular economy and water.
Climate finance
Northern Arc’s fund is backed with $50 million from the US International Development Finance Corp., or DFC, and $15 million from Austria’s development finance institution, OeEB.
The company wants to leverage its network of over 340 originator partners, 50 retail lending partners and over 1,100 investor partners to enhance climate financing in India. The Netherlands’ FMO earlier this year provided $75 million in debt to Northern Arc for green lending, small business lending and microlending.
