IFMR Capital recently completed a multi-originator securitization of micro-loans originated by Asirvad Microfinance Pvt Ltd, Sahayata Microfinance Pvt Ltd, Satin Creditcare Network Ltd and Sonata Finance Pvt Ltd. The transaction, valued at around INR 308 million (USD 6.5 million), is backed by around 42,000 microloans. Two tranches of securities were issued: a 77 percent senior-rated tranche with an expected maturity of 6 months and a 23 percent subordinated strip with an expected maturity of 11 months. CRISIL, the Indian rating agency, has assigned the highest short-term rating of P1+ to the senior tranche which will be fully paid out before the subordinated strip begins to receive cash flow from the microloans.
“Using the multi-originator securitisation structure, we have been able to help a number of MFIs access mainstream capital markets. Given the sizes of the institutions and the limited availability of capital to generate unencumbered portfolios, accessing capital markets on their own is an unviable option for most small and medium MFIs”, said Sucharita Mukherjee, CEO of IFMR Capital. “By pooling together the loan portfolios of these high-quality MFIs, we have demonstrated that these MFIs can access funding at a much lower cost than their average cost of funds. To the best of our knowledge, this is the first multi-originator securitisation of micro-loans in the world.”
By Jay Kumar, Research Assistant
About Asirvad Microfinance Pvt Ltd:
Established in 2007, Asirvad Microfinance Pvt Ltd began its operations with an authorized share capital of INR 50,000,000 (USD 1.1 million) and paid up share capital of INR 27 million (USD 600,000). Its loans have a duration of 50 weeks and an interest rate of 12 percent. The loan amount ranges from INR 5000 (USD 110) to INR 40,000 (USD 880).
About Satin Creditcare Network Ltd:
Established in 1990, Satin Creditcare Network Ltd is an Indian microfinance institution operating in East Delhi, Haryana, Punjab, Rajasthan, Uttaranchal, and Uttar Pradesh. As of 2009, it had a client base of 85,722, 61 branches and a portfolio of INR 908 million (USD 18.17 million).
About Sonata Finance Pvt Ltd:
Established in 2006, Sonata Finance Pvt Ltd is an Indian microfinance institution with headquarters in Allahabad, Uttar Pradesh. It offers income-generating loans, emergency loans, savings, and insurance. Clients can apply for a maximum loan of INR 8000 (USD 175). As of 2008, Sonata had a gross loan portfolio of 6.2 million, a return on assets of 7.36 percent and a return on equity of 36.24 percent. Its total assets are USD 8,160,699.
Additional Resources
1.)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asirvad+Microfinance+Pvt+Ltd
2.) Asirvad Microfinance Pvt Ltd: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asirvad+Microfinance+Pvt+Ltd
3.) Satin Creditcare Network Ltd: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Satin+Creditcare+Network+Ltd
4.) Sonata Finance Pvt Ltd: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sonata+Finance+Pvt+Ltd
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