Resources created and curated to support the growth of impact investing, for those new to the field and for experienced practitioners.
An Annual Showcase of Impact Investment Fund Managers
Established in 2014, we are a leading financial inclusion focused private debt fund manager from India with over USD300 million in investor commitments. In line with the work and ecosystem created by our parent company Northern Arc Capital, we facilitate investments that ensure easy access-to-finance for companies which have a demonstrable track record in increasing the penetration of financial services in India. Our investment strategy is centered around making impact-oriented yet returns-focused investments in a number of key financial-inclusion themed sectors, including Microfinance, Affordable Housing, Small Business Loans, Vehicle Loans, Agri-business Loans and Consumer Finance. Over the years, we have significantly contributed towards deepening institutional investor participation (domestic as well as overseas investors) in the financial inclusion space in India through our funds, in line with our longstanding mission is to bring about reliable and sustainable access-to-finance for the unserved/underserved population in India.
The role of private credit in the Indian impact investing space is quite subdued: over 90% of the impact investors in India target an equity strategy. We act as reliable and responsible providers of debt capital to institutions that ensure access-to-finance for the unbanked and underbanked in India.
Financial inclusion continues to be a significant need in India, especially in rural areas where financial access continues to be deficient. Despite several Government measures and external capital being channeled towards this objective, the size of the unbanked/under-banked population remains sizeable. Impact investing has gained rapid pace in India especially over the past decade with several institutions having emerged, focusing on bringing social upliftment to the economically backward classes. There are also several impact focused funds operating in this space, with the objective of furthering the reach of these institutions. However, over 90% of the impact funds in India are focused on private equity, often leaving out debt capital – a vital capital component for these institutions – unmet. We are one of the very few private debt players in India with a mission to provide reliable and responsible debt capital to institutions that ensure access-to-finance for the unbanked/underbanked segments.
We invest in a variety of financial inclusion themed sectors including Microfinance, Small Business Loan finance, Small Vehicle Loan finance, Agri-business finance, etc. Microfinance, which follows the JLG principle in India is given exclusively to women entrepreneurs, thereby empowering them as bread-winners and have a greater say in household financial affairs. Kinara Capital, one of the several portfolio companies in the Small Business Loan sector provides collateral free loans to small businesses (especially in manufacturing-supply chain space), and was founded by a female entrepreneur, and also provides discounted loan pricing for women borrowers. End-borrowers in our Vehicle Finance loans are often employee-turned-entrepreneurs who are often new to credit.
Ravi Vukkadala – Chief Executive Officer - Northern Arc Investments More Info
Ravi is the CEO of Northern Arc Investments and has over 16 years’ experience in credit investing, risk and fund management. Prior to joining Northern Arc, he was part of the Fixed Income investment team at Invesco Mutual fund overseeing credit and rates assessment. His capital market experience also includes stints with companies such as Bharti AXA Investment Managers, JM Financial Ltd, and Merrill Lynch. Ravi is a Chartered Financial Analyst (CFA Institute) & Financial Risk Manager (GARP) and holds a Post Graduate Diploma in Finance from NMIMS (Mumbai), Masters in Management & Information Systems from Virginia Tech (US) & Bachelor of Chemical Engineering from University of Mumbai.
Percentage of Total Assets Under
Management that are Impact Investments:
All our investments are made in institutions that have a stated focus to ensure providing access-to-finance to individuals and households that are unbanked/under-banked. Our portfolio companies have operations spread across India, especially in tier 2/tier 3 towns and cities where financial literacy and reach tends to be lower, and also target segments that are usually overlooked by formal channels of finance due to lack of size/scale, proper documentation & records, higher risk profile, etc. Depending on borrower behaviour and vintage, a few of our portfolio entities also assist by providing additional value-added products and services (e.g. insurance) to ensure that the beneficiaries benefit from these offerings and remain financially aware and protected.
As part of the pre-investment due diligence process, our investment team monitors a number of key ESG parameters (both quantitative and qualitative) such as transparency of communication, adherence to fair practice norms, employee welfare and benefits, fair policies and practices, policies against financing harmful activities, environmentally friendly operations, etc.