SKS Microfinance securitises loans worth Rs 50 cr with YES Bank

Country's only listed micro finance company SKS Microfinance today said it has securitised assets worth Rs 50 crore with private sector lender YES Bank.

The securitisation is of receivables from 7.3 lakh micro borrowers spread across 18 states, barring Andhra Pradesh. AP accounts for about 25% of the company's outstanding loan portfolio.

"SKS Microfinance today announced the completion of the first rated pool assignment (securitisation) for the micro finance sector after the notification of the Malegam Committee recommendations," the company said in a statement.

In March, the country's largest MFI SKS Microfinance had closed securitisation deals worth Rs 550 crore.

"The development reiterates SKS Microfinance's leadership position in the MFI sector and the confidence of the financial world in the MFI model followed by the company," SKS CFO Dilli Raj said.

Under the securitisation model, a bank combines and buys out the outstanding loans of an issuer. Following the passage of the Act in Andhra Pradesh last year which sought to clamp down on the MFIs for regulating their activities, the securitisation agreements by banks also saw a decline.