Northern Arc's Ambitious Fundraising for Financial Inclusion

Northern Arc, a non-bank lender, plans to raise Rs 1,000 crore through an alternate investment fund (AIF) via its arm, Northern Arc Investment Managers. Targeting six sectors, the fund aims to boost financial inclusion and economic growth, with additional Rs 500 crore possible via a green shoe option.

Northern Arc, a non-bank lender, announced on Monday that it plans to raise Rs 1,000 crore through an alternate investment fund (AIF) managed by its arm, Northern Arc Investment Managers (NAIM).

The category II AIF, dubbed the "Finserv Fund," seeks to enhance financial inclusion by lending to sectors such as small businesses, affordable housing, vehicle finance, agriculture, microfinance, and consumer finance.

The fund aims to invest in 45-55 entities over a four-year cycle and promises an internal rate of return between 14-14.50 percent. Northern Arc's extensive partnership network will aid in managing the portfolio efficiently.

(With inputs from agencies.)