Northern Arc Capital Limited and its subsidiaries have always stayed focused on its mission of catering to the diverse retail credit requirements of the under-served households and businesses in India. Fostering a business over the past 14+ years, the institution has not lost its focus on creating an impact in the lives of individuals and society by and large we’ve reached through our impact lending.
What is Impact Lending?
Impact Lending is a form of impact investing which aims to contribute towards achieving positive social and environmental impact. Impact lending enables the much-needed capital available to small businesses, nonprofits, and families either directly or through mission-oriented financial institutions in the respective sectors. Impact lending has emerged as a great opportunity to mobilize capital that intends to create good positive social, economic, or environmental outcomes alongside financial returns.
What Impact Means to Northern Arc?
Creating positive and meaningful impact is the quintessence of what we do, and we endeavour to maximise our impact through everything we do. By staying true to our mission of enabling access to finance with an impact driven lending, we cater todiverse retail credit requirements of the under-served households and businesses in India.
Gender & Inclusion
Women’s economic empowerment [has been one of the drivers of our impact creation through our lending practices. There is gender gap that exists in our society across various social aspects, one of which being access to finance. There exists a systemic issue in the business and lending community with respect to lack of gender equity, which arguably is undergoing a transformation in the recent years.
We endeavour to help reduce and close the gap between men and women in the financial inclusion space through our direct and institutional lending to women and women led businesses.
Climate Change
Building a climate change resilient and climate proof future is the urgent requirement across the globe. With climate change being a great challenge that the present and next generations to come would be encountering in terms of scale, magnitude and complexity, we have a role in addressing the challenge to transition to a low-carbon and resilient economy.
Northern Arc intends to position itself as a key player in the climate finance space, in India, making us one of the leaders in climate debt financing.
Environmental, Social and Governance
Northern Arc has embedded the responsible lending practice of considering ESG issues in the underwriting guidelines, when making lending / investment decisions, through our ESG Policy. We have adopted a risk-based approach to assess the ESG parameters of our investee companies which was framed on IFC Performance Standards as the base. We are determined to encourage our investee companies to adopt good international industry practices for their better performance against the ESG issues.
As part of our relationships with Originator Partners, we also monitor their adherence to norms on customer protection and fair practice codes - including instituting adequate mechanisms for resolution of complaints, fostering fair and fostering fair and respectful treatment of borrowers.
Besides adopting responsible lending practices, Northern Arc assess investee companies on gender indicators, develop a corporate gender scorecard and provides capacity-building training programs to promote gender sensitivity . The integration of this gender analysis would aid us to use finance as a tool to promote gender equality.
Forms of Impact at Northern Arc
Northern Arc Capital Limited endeavours to be a contributor towards achieving the United Nations Sustainable Development Goals (UNSDGs) by providing efficient access to debt finance to the underserved households and businesses. The institution’s commitment towards fulfilling the requirements of the UNSDGs has steered the business to impact millions of lives and thousands of businesses over the past 15 years.
Northern Arc directly contributes towards 9 (nine) UNSDGs through its business operations.
| Goal No. | Goal Name | Target | Northern Arc’s Adherence |
|---|---|---|---|
| Goal 1 | No Poverty | 1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance | Creating access to financial services through our originator partners and retail lending partners. |
| Goal 2 | Zero Hunger | 2.3 By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment | Creating access to finance for agriculture practices through our microfinance and agriculture supply chain originator partners. |
| Goal 5 | Gender Equality | 5.a Undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance, and natural resources, in accordance with national laws | Creating access to finance in the form of joint liability group loans that disproportionately benefits women through our microfinance originator partners. Our lending through our other originator partners, retail lending partners and retail branches also offers products for women. |
| Goal 7 | Affordable and Clean Energy | 7.a By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology | We have financed entities in the green energy sector such as renewable energy (wind and solar), electric-vehicle (EV) manufacturers, EV charging stations, and other related infrastructures. |
| Goal 8 | Decent Growth and Economic Growth | 8.10 Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all | We have expanded access to finance through our retail branches, and also strengthened the access to financial services through our originator partners and retail lending partners |
| Goal 9 | Industry Innovation and Infrastructure | 9.3 Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets | We have Increased the access to finance to small-scale industrial and enterprises through our loan against property. We have increased the access to finance to small-scale industrial and enterprises through supply chain finance. Created access to financial services to small businesses through our small business loan offering originator partners. |
| Goal 10 | Reduced Inequalities | 10.2 By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status | We have promoted economic inclusion to all people irrespective of age, sex, disability, race, ethnicity, origin, religion, or economic or other status through different models of financial inclusion – originator partners, retail branches, and retail lending partners – to enables access to finance for the underbanked and underserved. |
| Goal 13 | Climate Action | 13.1 Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries. | We have financed entities in the clean energy sector such as renewable energy (wind and solar), electric-vehicle (EV) manufacturers, EV charging stations, sustainable agriculture practices, agriculture supply chain, and waste management (recycling and bio-gas generation). |
| Goal 17 | Partnerships for the Goals | 17.3 Mobilize additional financial resources for developing countries from multiple sources | We have mobilized funds from multiple international dfis for on-lending to other financial institution. We’ve also mobilized funds for other financial institutions from offshore investors/lenders in the form of Pool Bond Issuance, Non-Convertible Debentures, External Commercial Borrowing and also serve as guarantor for transactions. |
