Microfinance ABS regroups after defaults

Category: ABS

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A number of Indian microfinance loan securitisations recently defaulted, halting a trend of strong performance and steady growth in the asset class. While demonetisation is partly to blame, lender overexpansion and the introduction of a competing credit instrument also took their toll.

Several firms have historically used securitisation to fund their microfinance lending in India, culminating in 2016 with microfinance securitisation volumes of R104bn.

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