Through PTI

NEW DELHI: The Asian Development Bank announced on Monday that it has signed a $ 40 million loan to Northern Arc Capital Limited (NACL) to support the livelihoods of microfinance borrowers and MSMEs in India.

The loan is disbursed to NACL as part of AfDB’s continued response to COVID-19.

NACL will on-lend the loan proceeds and provide guarantees to financial institutions and individual borrowers.

NACL will also on-lend to affordable housing finance companies, AfDB said in a statement.

“The pandemic has had a profound impact on the country’s informal economy, especially among microfinance borrowers and MSMEs.

NACL’s unique business model of working with the most affected segment of MSMEs and financial institutions makes it an ideal partner, ”said Christine Engstrom, Director of AfDB’s Private Sector Operations Department.

This project will provide further support to the continuing efforts of the Indian government to revive the flow of credit to this segment of the economy, Engstrom added.

NACL connects NBFCs, microfinance institutions and housing finance companies with major fundraisers for fundraising through a variety of products, such as partial risk guarantees for market issues. of capital, multi-issuer securitization and the issuance of pooled loans / bonds, according to the press release.

“This enables small and medium-sized NBFCs to deepen their presence and improve access to financial services to millions of financially excluded households in India,” he said, adding that his innovative solutions have enabled to around 250 partners, serving nearly 60 million customers in 680. districts across India, access funding from reputable investors.