Under the pool securitisation, micro loans that are made to borrowers like micro-entrepreneurs are bundled and are sold to investors, such as banks, to raise funds. This the largest rated pool assignment transaction in the Indian microfinance history, the company claimed.
SKS has already drawn the first tranche of R78.7 crore, comprising receivables from micro women borrowers from the weaker sections, as defined by the Reserve Bank of India. Pool receivables are identified from 18 non-Andhra Pradesh states where the company operates.
The pool is well-diversified with a single branch accounting for less than 1% of the pool, and the average loan amount being R10,717. The pool is rated as CARE A1+(SO) (highest safety) by CARE.
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.
Talking to FE, S Dilli Raj, chief financial officer, SKS Microfinance, said: This is the seventh transaction that we have done post-AP MFI Act. They comprise only receivables from non-AP states. All of them, without exception, have shown collection efficiency exceeding 98%.
Rated pool assignment is an 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, he adds.