Micro lender Spandana Sphoorty raises Rs 100 crore from Bandhan Bank in securitisation deal

The Hyderabad-based micro-finance lending company Spandana Sphoorty Financial has successfully completed its fourth securitisation deal. Through the deal Spandana has securitised Rs 100 crore portfolio to Bandhan Bank through Pass Through Certificate (PTC). The lending institution had received A plus rating on the pool by ICRA.

Securitisation is a process of pooling various types of loan receivables and selling their related cash flows to third party investors as securities. This frees up capital which can be used for fresh lending.

Earlier, Spandana has securitised Rs 90 crore portfolio at the rate of Rs 30 crore each to Kotak Mahindra Bank, Mahindra Finance and Hinduja Leyland Finance through PTCs. All these pools were rated by ICRA and they were given A plus and A minus rating.

This is the first micro finance portfolio securitisation for Bandhan Bank. "We are proud to have done this with Bandhan and we value the relationship. She further added that this is a testimony of Bandhan's commitment to the financial inclusion as the bank is expanding its reach beyond its own branch network," said Spandana, MD, Padmaja Reddy in a statement.

Spandana has recently expanded its operations to Bihar and West Bengal and the funds, added Reddy, will be used for on-lending to micro finance borrowers. She also said that portfolio securitisation helps company to effectively deploy its capital as the company does not have to allocate capital towards portfolio securitised.

Spandana has raised Rs 1800 crore since March 2017 from 21 lenders. This has helped in growing its portfolio from Rs 1300 crore to Rs 2400 crore in the past six months post its exit from corporate debt restructuring.

The company operates out of 14 states through its 636 branches.