Securitisation market volume rises in FY 2016 - Feedback

Securitisation market volume increased 47% to Rs 63,052 crore in the fiscal year ended March 2016 driven by investor interest in microfinance assets and a revival in appetite for vehicle and construction equipment transactions.

In a report released on Tuesday rating agency Care said loans from micro finance companies that qualify under the agriculture or weaker sections category has emerged as a preferred asset class for banks to meet their priority sector leading to high demand for securities from these categories. Banks have to lend 40% of their loans to the so-called priority sector which includes loans to agriculture and allied activities, to small entrepreneurs and also to weaker sections of society like village artisans, people from scheduled castes and scheduled tribes and minority communities. In the fiscal year ended March 2016, volumes of certificates issued by micro finance companies increased by 67% much higher than the 20% growth seen in the fiscal year ended March 2015.

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