by the MicroCapital Team - Deals -

PRESS RELEASE: SKS Microfinance Securitization Receives “Highest Safety” Rating from Credit Analysis & Research

Source: SKS Microfinance.

Original press release available online.

HYDERABAD, October 12 – For the very first time in the MFI sector, SKS Microfinance’s securitized portfolio worth Rs 137 crore with YES Bank has been rated by Credit Analysis & Research Ltd. (CARE) as PR1+ SO (Highest Safety) rating. The Securitization enables YES Bank to purchase from SKS Microfinance 1,58,878 micro loans offered to Schedule Caste, Schedule Tribe and other minority sections of the society.

Announcing this landmark transaction, Mr. S. Dilli Raj, CFO of SKS Microfinance said, “This is a major step in ‘financial inclusion’. Rated transactions of this kind accelerate capital access to MFIs and provide social benefits to the unbanked rural poor. The PR1+ SO (Highest safety) rating indicates the impeccable credit quality of the portfolio. Innovative funding solutions of this nature will help the sector to broad base its Sources mix and benefit from the concomitant ‘capital relief’.”

The transaction has been assigned with a rating opinion of PR1+ SO (Very Strong Safety) by CARE following an analysis of over 1 million loans extended by SKS. The assignment transaction is credit enhanced with extra collateralisation and Cash margin which are subordinated to payouts to YES Bank. The Pool is geographically diversified across17 states. The Pool has net seasoning of 10 weeks and the average ticket size is Rs.11,752/. SKS will service the pool contracts as the servicing agent.

SKS Microfinance has in recent times announced a series of innovations in fund raising including many firsts like ‘Weaker section’ Pool securitization deal with ICICI, issuance of Non Convertible Debentures, Commercial Papers and listed debt securities etc. All of these are aimed at expanding the funding options available to MFIs.

SKS Microfinance is providing collateral free income generation loans worth Rs 9,840 crore to 53 lakh poor households across 19 states through 1,676 branches.

About SKS Microfinance

SKS Microfinance is a non-bank finance company (NBFC) whose mission is to eradicate poverty by providing financial services to the poor. Established in 1998, SKS Microfinance is India’s largest and one of the world’s fastest growing microfinance organizations with annual growth rate of 128%. SKS Microfinance provides collateral free income generation loans worth Rs 9,840 crore to 53 lakh members across 72,000 villages and slums in 19 states loans with a 99.5 % repayment rate. SKS also provides life and retail insurance to its members.

SKS has received numerous awards including the Young Global Leaders by World Economic Forum, CGAP Pro-Poor Innovation Award, the ABN-AMRO/Planet Finance Process Excellence Award, Citibank Information Integrity Award, the Digital Partners SEL Award and the Grameen Foundation USA Excellence Award. It was founded by Vikram Akula, who was named by TIME magazine as one of the 100 Most Influential People in the World (2006).

Similar Posts: