SKS securitises Rs 354 crore, stock gains

SKS Microfinance, the country’s only listed micro lender, today said it has securitised Rs 354 crore of receivables from 18 states, except Andhra Pradesh.

The securitisation was done by a major public sector bank, SKS said in a statement, without naming the lender. SKS shares were up 1.64 percent at Rs 130.40 on the BSE in late morning trade.

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Under the pool securitisation, bundling micro loans made to borrowers like micro-entrepreneurs are sold to investors such as banks to raise funds. The microfinance company has already drawn down the first tranche of Rs 78.7 crore comprising receivables from micro women borrowers from the weaker sections, as defined by the Reserve Bank of India, the statement said.

“This is the largest rated pool assignment transaction in the Indian microfinance history,” the company claimed. The pool is well diversified with the average loan amount being Rs 10,717. The pool is rated as CARE A1+(SO) (Highest Safety) by CARE, it said. Instruments with a CARE A1+ (SO) rating are considered to have a strong capacity for timely payment of short-term debt obligations and carry the lowest credit risk, SKS said.

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Commenting on the transaction, S Dilli Raj, Chief Financial Officer, SKS Microfinance, said, rated pool assignment is an excellent instrument of confluence which achieves the amalgamation of the funding capabilities of the banking system and the credit delivery skills of microfinance companies.

“This sort of confluence may well be the real answer for financial inclusion. Our ability to consummate the largest rated pool assignment in the Indian microfinance history clearly demonstrates that funding concerns raised post the AP MFI Act are behind SKS Microfinance,” Dilli Raj said.

Earlier this month, SKS completed another securitisation for Rs 243 crore.

The present transaction is SKS Microfinance Limited’s eighth assignment or securitisation transaction post the AP MFI Act.

All the rated papers of SKS Microfinance have shown robust collection efficiency of more than 98 percent. Credit enhancement has not been utilised in any of these transactions, SKS claimed in the statement.

PTI