In a first for any wealth management firm in India, Avendus capital has invested in microfinance loan backed securities. Avendus Capital is a privately held investment bank which offers Private Equity Syndication, M&A, Fixed Income, Structured Finance and Strategic Advisory services to corporates and investors in India and around the globe.
The Rs 36.9 Crore multi-originator micro-loan securitisation involved Delhi based MFI Satin Creditcare, Rajasthan based Sahayata Microfinance and Tamil Nadu based MFI, Asirvad. This transaction is significant, because it has for the first time brought private wealth investors to microfinance and has also lowered the collateral requirements from the three MFIs compared to any previous transaction.
The multi originator securitisation structure was carried out in the 3rd week of September 2010 by Chennai based Non-Banking Finance Company -IFMR Capital.
IFMR Capital pooled the assets of three different microfinance entities for this securitisation. The new structure helped to increase the size of the total transaction while at the same time reducing the cost of accessing capital markets, which now allows even small high quality Microfinance Institutions to take the capital markets route to debt financing.