Northern Arc Group to acquire SMILE Microfin

IPO bound Northern Arc Group to acquire the microfinance business of S.M.I.L.E. Microfinance Ltd on slump sale basis to strengthen its retail finance business. The transaction will involve the takeover of the microfinance portfolio of S.M.I.L.E., along with its network of nearly 150 branches catering to over 0.2 millon customers.

According to an ICRA report SMILE had total managed assets of Rs 460 crore at the end of September 2021. The gross non-performing assets (NPAs) of 16.3 per cent and net NPAs of 3.3 per cent as of September 2021.

The acquisition will help Northern Arc to target the next billion in the rural finance business, through a digital and data-led platform. The Northern Arc Group has recently entered the retail finance business through two segments – rural finance and secured MSME finance. This business will capitalize on Northern Arc’s capabilities across domain know-how, underwriting track record, technology, data, and analytics.