IFMR Capital a Chennai based Non Banking Finance Company (NBFC) expects more than Rs 1,000 crore worth of securitisation transactions to take place in the Indian micro finance sector for the financial year 2010-11, a top official has said.
IFMR Capital(Website) is one of the three subsidiaries of IFMR Trust whose main aim is to provide liquidity and access to debt for institutions with a rural focus this includes microfinance institutions and small and medium enterprises. It has been using financial tools such as securitisation, repackaging, and credit enhancement to create custom products that match the risk profiles of investors, thus providing businesses access to domestic and international markets.
For smaller microfinance institutions, IFMR Capital is looking to pool portfolios from four or five institutions, in order to make the capital markets accessible to these institutions while keeping the size of the transaction attractive for potential investors.
In this financial year the company has so far done six transaction which add up to Rs 300 crore and aims to cross over Rs 1,000 crore by end of the financial year March 2011.
Securitisation is the process through which financial institutions are able to pool the receivables from loans and sell the same to third parties like banks, mutual funds and insurance companies. This is the most common practice by which non-banking finance companies raise money and has of late gained popularity among the bigger microfinance institutions in India.
Visit the IFMR Capital Deal Database Portal to get the latest information on asset backed secularization deals in India at the link below.