Indian microfinance institution (MFI) Jagaran Microfin Private Limited reportedly has sold 50 percent of its loan portfolio for INR 16.9 crore (USD 3.32 million) to Indian commercial bank Ratnakar Bank “in a rated pool transaction to release capital and push business growth.” The transaction has been rated A3 (SO) by Credit Rating and Information Services of India Limited (CRISIL), an Indian credit rating agency, indicating a “moderate degree of safety in regard to timely payment” [1].
Prior to the securitization deal with Ratnakar Bank, Jagaran Microfin had a gross loan portfolio of INR 35 crore (USD 6.87 million), 40 branches and approximately 50,000 clients. Jagaran Microfin is a wholly-owned subsidiary of Indian microfinance institution Gram Tarang Financial Services Private Limited (GTFS).
By Brendan Millan, Research Associate
About Jagaran Microfin Private Limited: Established in 2010, Jagaran Microfin is a microfinance institution (MFI) in India that is wholly owned by microfinance institution Gram Tarang Financial Services Private Limited (GTFS). As of February 2012, Jagaran Microfin had a gross loan portfolio of INR 35 crore (USD 6.87 million), 40 branches and approximately 50,000 clients. Jagran Microfin does not report financial data to the US-based nonprofit Microfinance Information Exchange (MIX).
About Gram Tarang Financial Services Private Limited (GTFS): GTFS is a microfinance company in India that comes under the GTFS group of companies. GTFS group is a distributor of insurance and mutual funds and has reached approximately four million people in rural India. GTFS does not report financial data to the US-based nonprofit Microfinance Information Exchange (MIX). As of 2012, GTFS has grown to encompass 275 branches. GTFS is the owner of microfinance institution (MFI) Jagaran Microfin.
About Ratnakar Bank: Established in 1943, Ratnakar Bank is a private, commercial bank in India. For the year 2011, Ratnakar Bank reported total assets of INR 20.9 billion (USD 407 million) and a return on assets (ROA) of 1.05 percent.
About Credit Rating and Information Services of India Limited (CRISIL): Founded in 1987, CRISIL is a research, risk and policy advisory company that is based in Bangalore, India. It provides ratings for financial institutions, including approximately 30 microfinance institutions (MFIs) that report to the US-based, nonprofit Microfinance Information Exchange (MIX) as of May 2011. Its offerings also include research on India’s economy, investment research outsourcing, fund services, risk management and infrastructure advisory services. CRISIL is majority-held by Standard & Poor’s, a US-based credit rating agency.
Sources and Resources:
[1] The Economic Times: “Jagaran Microfin Sells Loans Worth Rs 17 Crore to Ratnakar Bank to Release Capital” by Atmadip Ray. http://articles.economictimes.indiatimes.com/2012-03-28/news/31249931_1_priority-sector-ratnakar-bank-agriculture-lending-target
MicroCapital.org Article, January 27, 2011, “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 Article, “Indian Rating Agencies, ICRA and Credit Rating and Information Services of India Limited (CRISIL) Predicts Reserve Bank of India Guidelines Will Spur Bank Lending to Microfinance Institutions (MFIs), Trigger Consolidation”, https://www.microcapital.org/microcapital-brief-credit-rating-and-information-services-of-india-limited-crisil-predicts-reserve-bank-of-india-guidelines-will-spur-bank-lending-to-microfinance-institutions-mfis-trigger-conso/
MicroCapital.org Article, January 4, 2011, “Rating Agency CRISIL downgrades Five Indian Microfinance Institutions (MFIs)”, https://www.microcapital.org/microcapital-brief-rating-agency-crisil-downgrades-five-indian-microfinance-institutions-mfis/
MicroCapital Universe Profile: Gram Tarang Financial Services Private Limited (GTFS), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Gram+Tarang+Financial+Services+Private+Limited+%28GTFS%29
MicroCapital Universe Profile: Jagaran Microfin Private Limited, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Jagaran+Microfin+Private+Limited
MicroCapital Universe Profile: Credit Rating and Information Services of India Limited (CRISIL), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Credit+Rating+and+Information+Services+of+India+Ltd.+%28CRISIL
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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