By Kshama Fernandes, IFMR Capital
Over the last few years, microfinance has attracted a large number of equity and debt investors. The Andhra Pradesh ordinance however has resulted in investors suddenly pulling away from this sector, many having taken to adopting a wait and watch approach at a time when their intervention would be most crucial.
It is a turbulent time for microfinance. IFMR Capital shares the concerns of the sector. We have been carefully monitoring not only our exposures via our portfolio data and field monitoring systems, but also the performance of the microfinance sector as a whole, the debt funding activity and the impact of this crisis on the short term liquidity of MFIs. While clearly some geographies have been affected, our surveillance on-the-ground and our portfolio performance seem to convey a picture that is quite different from what seems to be propagated by media and discussed in investor circles.
We believe sunlight is the best disinfectant and would like to share some information on our portfolio exposures across various geographies and entities.
We have put together a snapshot of our microfinance exposures and portfolio performance across the country which gives a clearer sense of the picture as we see it today. To summarise, we have seen no drop in collection efficiencies, either on loans made by us to our MFI partners or on the portfolios underlying the various securitization transactions structured, arranged and invested in by IFMR Capital. Our loans and investments in securitizations show zero over dues. The collection efficiency on the underlying micro-loans securing our assets, stands at close to 99 percent. Our exposures are well diversified over 200 plus districts across various states in the country.
IFMR Capital has partnered with 15 microfinance institutions till date through securitization and through loans made to microfinance institutions. The sector has witnessed capital markets access for MFIs though the development of a rated asset class and a class of new investors such as mutual funds, NBFCs, private wealth and bank treasuries. It has also seen the evolution of a new transparent benchmark of asset class performance. Our MFIs partners have not only delivered in terms of the data and information rigor of capital markets transactions, but have also consistently demonstrated their ability to service the underlying loans effectively.
A picture is worth a thousand words. The tables and charts below give an insight into the performance of the transactions structured, arranged and invested in by IFMR Capital.