The Portfolio has been rated as PR 1 + SO Highest Safety by CARE
SKS Microfinance last week announced the completion of the first rated pool assignment (securitization) for the microfinance sector after the notification of Malegam Committee Recommendations.
The rated pool assignment transaction of Rs. 50 crore comprises 65,438 contracts rated PR1+ (SO) by CARE, with Yes Bank. This assignment follows a securitization of a pool of Rs. 550 crore with assignee banks earlier this month.
Commenting on the assignment, Mr S Dilli Raj, CFO — SKS Microfinance Ltd, said. “The development reiterates SKS Microfinance’s leadership position in the MFI sector and the confidence of the financial world in the MFI model followed by the Company.” Instruments with a PR1+ (SO) rating are considered to have a strong capacity for timely payment of short term debt obligations and carry the lowest credit risk.
The securitization is of receivables from 7,30,000 micro borrowers as defined by the RBI. Pool receivables are identified from 18 non AP states where SKS operates. The pool is well diversified with a single branch accounting of less than 1% of the pool, with the average loan amount being Rs. 12,000.