Securitisation volume soars 48% in H1 as NBFC crisis lingers

Shadow banks' continuing difficulties in accessing finance have led to a massive 48% jump in securitisation volume in the first half of the fiscal year to Rs 1 lakh crore, finds a report.

Decuritisation is a process under which a nonbanking financier sells its future receivables from a loan or a pile of loans to a different entity for a discount for cash payout.

Most non-banking finance companies have been struggling for liquidity since the second half of 2018, after a crisis triggered by infra lender IL&FS' defaults. As funds get scarce, a lot of them are selling future receivables.

In a report on Monday, rating agency Crisil attributes growth in the first half period to Rs 1 lakh crore to both established and new originators opting for securitisation, pointing out that there were 100 originators in the market as against 70 in the year-ago period.

NBFCs and HFCs do securitisation to augment their resources profile in a challenging environment leading to the massive 48% increase in volume, it said.

Growth was broad-based with both mortgage backed securitisation and asset-backed securitization logging in healthy uptick in volume, it says.

Securitisation of gold loan receivables, personal loan receivables, twowheeler loan receivables and lease rental receivables are now mainstream, with newer originators increasingly participating in such transactions, it notes.