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SKS Microfinance concludes two microfinance securitization transactions

11 Feb 2013 Evaluate

SKS Microfinance has concluded two microfinance securitization transactions aggregating to Rs. 390 crore. With this, company has completed seven securitization transactions aggregating to Rs 803 crore in FY13.

SKS Microfinance has downloaded the receivables from microloans extended to rural women entrepreneurs to a Special Purpose Vehicle, and Pass through Certificates (PTCs) have been purchased by a major public sector bank and a private sector bank in the deals announced. Notably, the entire pool qualifies for the weaker section treatment as per the Reserve Bank of India's Priority Sector lending guidelines.

All transactions have been rated A1+ (SO), signifying 'Highest Safety', by one of the leading rating agencies, and Credit enhancement has not been invoked in any of the structures. The pools are structured with geographical diversity as they comprise receivables from 14 states (excluding Andhra Pradesh) after capping the maximum pool exposure of -23.50% for any state. Also, -35% of the clients have completed three loan cycles.

SKS Microfinance has completed 22 assignments/ securitization transactions worth Rs. 2,481 crore since October 2010, when Andhra Pradesh promulgated its Andhra Pradesh Micro Finance Institutions (Regulation of Money-lending) Ordinance, 2010 (which became an Act in December 2010).

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