Opening Doors to Financial Services

Northern Arc Capital, led by Kshama Fernandes, provides financial access to underserved households and businesses across India.

By Michael Gallant

September 2021

Opening Doors to Financial Services

As CEO of the innovative financial platform Northern Arc Capital, Kshama Fernandes has helped raise over Rs. 950 billion in financing for clients, who in turn have impacted over 40 million Indian women across 28 states and seven union territories. Photograph courtesy Kshama Fernandes

This is the third in a four-part series showcasing successful female CEOs in India. 

In 2009, Kshama Fernandes and a small group of like-minded people came together to reimagine how everyone in India could access the power and potential of financial services—and the results of their collaboration speak for themselves.

As CEO of the innovative financial platform Northern Arc Capital, Fernandes has helped raise over Rs. 950 billion in financing for clients, who in turn have impacted over 40 million Indian women across 28 states and seven union territories. “We set out to create a platform that would provide access to finance to underserved households and businesses,” says Fernandes. “We wanted to create a platform that would bring together borrowers and lenders across sectors, geographies and offerings.”

Fernandes’ deeper motivation for increasing Indians’ access to financial services is simple but powerful: “I have closely seen poverty and witnessed lives of people who have little to fall back upon,” she says. “Northern Arc has given me the empowerment and the ability to change that world for the better.”

Fernandes grew up in a small fishing village in Goa, learned from hand-me-down books at the local village school, and persevered to earn a Ph.D., “all because I had timely access to the right opportunities,” she says. She began working on Northern Arc not with the intention of rising to become its leader, but of wanting to address the financial challenges faced by many excluded and underserved communities. “I believe that access to finance can be empowering, and it can give wings to dreams,” she says. “Providing finance in a dignified and commercially sustainable manner can be transformational.”

At first, Fernandes served as Northern Arc’s chief risk officer, a role in which she used her expertise in data analytics to understand the best ways to provide credit to underserved communities. She took the lead as CEO in 2012 and has helped grow the company into a powerful force for opportunity and equity.

In March 2021, Northern Arc received $50 million debt financing from the U.S. International Development Finance Corporation (DFC), to be used for on-lending to financial institutions as well as lending directly to retail customers. This was among the first major facilities that were sanctioned by global development financial institutions to the non-banking financial companies sector post the onset of the COVID-19 pandemic. DFC, the U.S. government’s development finance institution, partners with the private sector to finance solutions to the most critical challenges facing the developing world today.

“Communities across the globe continue to face challenges in food security, sanitation and financial inclusion–especially when it comes to rural and women-owned enterprises,” said Acting DFC Chief Executive Officer Dev Jagadesan. “DFC’s investment in Northern Arc represents an investment in women’s economic empowerment and sends a powerful message of U.S. support for gender equity.”

While Fernandes is thrilled with Northern Arc’s success, she sees more work to be done. Only eight percent of Indian adults have borrowed money from banks, companies or institutions, she says—and increased availability of loans can empower families, communities and small businesses to grow and thrive. “I keep thinking about the possibilities that will open up when there is equal and efficient access to finance for everyone,” Fernandes says. “I keep thinking about what that can mean for each individual and for the nation. That keeps me going.”

To read about more ventures by successful women CEOs supported by DFC, see A Fruitful Venture and Lending a Hand to Small Businesses.

Michael Gallant is the founder and chief executive officer of Gallant Music. He lives in New York City.


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