SKS Microfinance completes Rs 215-crore securitisation

Total sum of securitisations completed by SKS so far during the year stands at Rs 616.8 crore

SKS Microfinance, India’s only listed microfinance institution, said it had completed a substantial debt securitisation of Rs 215 crore. Securitisations worth Rs 321 crore and Rs 80.81 crore, were completed on September 30 and December 11, respectively this year.

“This transaction is priced a good 200 basis points lower than our cost of borrowing for the previous quarter,” Chief Financial Officer S Dilli Raj said. He added SKS had passed on the receivables from loans to about 250,000 rural women entrepreneurs to a private bank. The transaction will benefit the bank, as the entire pool qualifies for priority sector treatment, according to the Reserve Bank of India’s priority sector lending guidelines.

While 27 per cent of the pool is accounted for by women entrepreneurs from scheduled castes and scheduled tribes, those from minority groups account for 21 per cent and backward classes 37 per cent.

The pool is rated A+(SO) by a leading rating agency, indicating an adequate degree of safety and timely servicing of financial obligation. Such instruments carried low credit risks, Raj said. In November, SKS had said it planned to draw down debt of Rs 2,500 crore in the second half of this financial year. Of this, half was expected to come from securitisation deals.

On Thursday, the SKS stock closed at Rs 176.6 on the BSE, up 0.14 per cent.