Northern Arc India Impact Fund

Development impacts

• Local economic growth

  The fund will invest in 25+ promising early-stage companies in the lending and MSME space which find it difficult to access mainstream debt finance (e.g. from banks), for end use as growth capital. These companies are innovators in terms of product / target segment / geographical reach / operations, setting them apart from the mainstream.

• Financial inclusion

  The Fund strives to not only provide loans for income generating purposes, but also to improve lives through opportunities for homeownership / home improvement / access to sanitation / vehicle ownership, amongst others. This is achieved through investments in MFI, agri-lending, vehicle-finance entities, and to MSMEs for business expansion. This also enhances credit access to new-to-credit customers and first-time buyers of commercial vehicles.

• Promotion of ESG best practices

  Being the first European development finance institution to invest in funds managed by NAIM, BIO can play a role in promoting E&S best practices.

  An Environmental and Social Action Plan (ESAP) has been drafted and contains the adoption of the EDFI exclusion list, a recommendation to conduct Client Protection Principles (CPP) assessments at the level of the MFI investee companies, the implementation of an upgraded environmental and social (E&S) management system, and the hiring of a dedicated E&S Officer at the level of the Fund Manager.

• Gender

  Beyond 2X eligibility on all criteria, the Northern Arc Group, in cooperation with IFC, is working towards adopting a Gender Lens Investing Framework which aims to help the organization integrate gender considerations in its credit and underwriting process.