SKS securitises for Rs321 crore more

SKS Microfinance, the sole listed lender of micro loans, has raised Rs321 crore from four banks by securitising its loan book.

It completed two rated pool assignment transactions worth `221 crore and two assignment transactions worth `100 crore from two public sector and two private banks.

With the latest round, SKS has raised a total of `918 crore by pledging its loan book.

The company had raised `243 crore in January and `354 crore in February through this route.

The latest set of four transactions were struck at an annual interest rate of about 12%, about 150 basis points lower than the previous two transactions.

The micro-lender has also obtained term loans worth `240 crore from three public sector banks, taking the total debt inflow from banks to `1,158 crore.

“Fund flow has been gaining momentum in recent months with the overall environment turning positive for the microfinance sector,” S Dilli Raj, SKS’s chief finance officer, said.

“Contributing to the optimism are the Reserve Bank of India guidelines for the NBFC-MFIs on December 2, 2011, the firm steps taken by the Centre to table the Microfinance Institutions (Development and Regulation) Bill in the present session of Parliament as also the finance minister Pranab Mukherjee’s special mention of the government’s decision in this regard during this Budget speech,” he said.

SKS was one of the micro
finance institutions (MFIs) to be hit hard after the Andhra Pradesh government promulgated an Act to regulate the micro-lending in the state after several borrowers committed suicide due to the
alleged coercive recovery practices of the MFIs.  With the recoveries and credit expansion in AP market almost coming to a halt, SKS has been focusing on several non-AP markets including Karnataka. SKS has gone for 15 securitisation transactions post the promulgation of the Andhra Pradesh MFI Act.