Mumbai: Securitization of loans by smaller NBFCs and microfinance institutions has seen a sharp fall as covid-19 and moratorium impact keep investors away.
Securitization involves pooling of loan assets and selling to investors such as banks, mutual funds and others, which helps NBFCs and micro lenders mobilize capital for further growth.
Generally, these are executed through the so-called pass through certificates (PTC) route. According to Kshama Fernandes, managing director and chief executive at Northern Arc Capital, which helps NBFCs and MFIs access the debt capital market, the platform has seen a sharp dip in fundraising activity since last week of March. "Since 24 March, we have seen an 80% drop in approval of on-balance sheet