Indian rating agency ICRA Limited (ICRA) has assigned a conditional rating of A2(SO) to a series of pass through certificates (PTCs) backed by INR 7.18 crores (USD 1.45 million) in microloan receivables originated by Arohan Financial Services Private Limited (Arohan), a Kolkata-based non-banking financial company (NBFC). The rating is based on the assumption that the transaction is valid under the regulatory guidelines on securitization that are due to be finalized shortly by the Reserve Bank of India, the central banking authority for the country. The A2 rating, defined as an “above-average-credit-quality,” is given to debt instruments with original maturity within one year, while SO refers to the status of the securitization as a “Structured Obligation.” Formerly known as Investment Information and Credit Rating Agency of India Limited, ICRA was set up in 1991. Its largest shareholder is Moody’s Investors Service of the US.
As of May 2011, Arohan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 20 million, a gross loan portfolio of USD 13.6 million and approximately 165,000 borrowers. As of 2010, its return on assets (ROA) stood at 0.32 percent and return on equity (ROE) at 1.63 percent.
By Nisha Koul, Research Associate
About Arohan Financial Services Private Limited (Arohan): Established in 2006, Arohan Financial Services Private Limited (Arohan) is a for-profit non-banking financial company that provides financial services to socio-economically disadvantaged segments of society through financial and support services. It has 147 branches across the Indian states of West Bengal, Bihar and Assam. As of May 2011, Arohan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 20 million, a gross loan portfolio of USD 13.6 million and approximately 165,000 borrowers. As of 2010, its return on assets (ROA) stood at 0.32 percent and return on equity (ROE) at 1.63 percent.
About ICRA Limited (ICRA): Formerly known as Investment Information and Credit Rating Agency of India Limited, ICRA Limited (ICRA) was set up in 1991 by a group of Indian commercial banks, investment companies and financial institutions as an independent agency. It is a public limited company and – together with its subsidiaries – forms the ICRA Group of companies (Group ICRA). Its largest shareholder is Moody’s Investors Service of the US.
Sources and Additional Resources:
ICRA, Reports, http://icra.in/Files/Reports/Rationale/Arohan%20Financial-r-01092011.pdf
MicroCapital.org story, January 27, 2011, “MICROCAPITAL BRIEF: Indian Rating Agencies, ICRA and Credit Rating and Information Services of India Limited (CRISIL), Predict Microfinance Institution (MFI) Consolidation Would Result From Reserve Bank of India (RBI) Proposals,” https://www.microcapital.org/microcapital-brief-indian-rating-agencies-icra-and-credit-rating-and-information-services-of-india-limited-crisil-predict-microfinance-institution-mfi-consolidation-would-result-from-reserve-ba/
MicroCapital.org story, July 2, 2010, “MICROCAPITAL BRIEF: Bharti AXA General Insurance Predicts 70 Percent Rise in Turnover from Collaboration with Indian Microfinance Institutions Anjali Microfinance and Arohan Financial Services,” https://www.microcapital.org/microcapital-brief-bharti-axa-general-insurance-predicts-70-percent-rise-in-turnover-from-collaboration-with-indian-microfinance-institutions-anjali-microfinance-and-arohan-financial-services/
MicroCapital.org story, December 17, 2009, “MICROCAPITAL BRIEF: Intellecap’s 2009 Srijan Awards Go to Arohan, Grama Vidiyal, Sahayata Microfinance, Vortex Engineering,” https://www.microcapital.org/microcapital-brief-intellecaps-2009-srijan-awards-go-to-arohan-grama-vidiyal-sahayata-microfinance-vortex-engineering/
MicroCapital Universe Profile: Arohan Financial Services Private Limited (Arohan), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Arohan
MicroCapital Universe Profile: ICRA Limited, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ICRA
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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