Retail Loan Securitisations Spurt 256 Per Cent In 2002-03

There has been an annualised growth of 256 per cent in asset-backed securitisation (ABS) as securitisation of retail loans rose from Rs 430 crore in 2000-01 to Rs 5,460 crore in 2002-03.

According to a Crisil study, against six transactions in 2000-01, the agency rated 53 transactions in 2002-03.

This indicates the heightened activity in the market, stated Crisil.

The rating agency expects the ABS market to grow by around 40-50 per cent in the next few years with the issuance of mortgage-backed securitisation (MBS) doubling in volumes within the next two years.

The two asset classes dominating the retail securitisation market are automobile (cars, commercial vehicles, two-wheelers and construction equipment) and housing loans.

 

Securitisation is increasingly becoming an important source of funding in the automobile finance market.

In 2002-03, securitisation as a proportion of disbursement increased to 13.3 per cent for the top 10 automobile finance players against 2.7 per cent in 2000-01.

The MBS market has equally picked up. Both the National Housing Bank