SKS Mi­crofin Raises .₹ 2,825 cr by Se­cu­ri­tis­ing Debt in 4th Qtr

The amount raised through sell­ing loan re­ceiv­ables is 80% more than last year

The Economic Times - - Companies: Pursuit Of Profit - At­madip.Ray@ times­

Kolkata: In what ap­pears to be a sign of re­vival in the mori­bund se­cu­ri­ti­sa­tion mar­ket, SKS Mi­cro­fi­nance, the listed lender to the poor, has raised .₹ 2,825 crore by sell­ing its loan re­ceiv­ables to in­vestors as well as banks in the fourth quar­ter. This was 80% more than what the mi­cro lender did in the year-ago quar­ter.

Ac­cord­ing to pri­mary es­ti­mates by ICRA, the com­bined vol­ume of se­cu­ri­ti­sa­tion and di­rect sell­ing of loans is likely to grow by a third to around .₹ 59,000 crore in 2015-16, com­pared with .₹ 44,000 crore in the pre­ced­ing fis­cal.

Se­cu­ri­ti­sa­tion is a process of pool­ing var­i­ous types of loan re­ceiv­ables and sell­ing their re­lated cash flows to third-party in­vestors as se­cu­ri­ties. Banks with gaps in pri­or­ity lend­ing in­vest in pass through cer­tifi­cates is­sued by lenders with high vol­ume of pri­or­ity loans. Banks also pur­chase pri­or­ity sec­tor loan re­ceiv­able pools di­rectly from other lenders, which is known as di­rect as­sign­ment of loans.

SKS pres­i­dent Dilli Raj told ET that the mi­cro lender had sold pass through cer­tifi­cates to raise .₹ 2,310 crore from in­vestors while it sold re­ceiv­ables worth .₹ 506 crore di­rectly to banks. In 2014-15, SKS had raised .₹ 1,559 crore by sell­ing loans through th­ese routes.

Band­han Bank also sold pri­or­ity sec­tor loans worth .₹ 2,000 crore to other banks as di­rect as­sign­ment.

Be­fore last fis­cal, the mar­ket had seen steady de­cline amid low loans growth. The com­bined value of re­tail loans as­signed and se­cu­ri­ti­sa­tion was aroSund .₹ 44,000 crore in 2014-15.

SKS sold pass through cer­tifi­cates to raise 2,310 crore from in­vestors, and sold re­ceiv­ables worth 506 crore di­rectly to banks

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