SKS Microfinance said it has raised R200 crore by selling loans to a bank through a securitisation deal. This is the first major deal in the troubled microfinance sector after the Reserve Bank issued revised securitisation guidelines for non-banking finance companies in August. However, the name of the bank was not revealed.
?This is the first substantial microfinance securitisation of R200 crore post the issuance of revised securitisation guidelines for non-banking finance companies by Reserve Bank of India on August 21, 2012, stipulating minimum holding period (MHP) of three months and minimum retention requirement (MRR) of 5%,? the company said in a release.
The company has downloaded the receivables from microloans extended to more than 2,60,000 rural women entrepreneurs for a special purpose vehicle, and pass through certificates (PTCs) have been purchased by a major public sector bank. Notably, the entire pool qualifies for the weaker section treatment as per RBI’s priority sector lending guidelines.
?The present transaction generates liquidity of R200 crore for SKS Microfinance and also brings in the concomitant capital relief,? said S Dilli Raj, chief financial officer. ?This corroborates the structuring skills of SKS Microfinance and the impeccable credit quality of its non-Andhra Pradesh portfolio. Notably, 26% of the pool is from scheduled caste/scheduled tribe entrepreneurs, 16% from minorities and the remaining 58% from women belonging to the other backward castes. This is a credible affirmative action and the most satisfying aspect of this transaction,” he added.