Microfinance NBFC Janalakshmi closes 250 million rupees securitization deal with IFMR Capital

August 23, 2010 6:09 AM EDT

Bangalore based Janalakshmi Financial Services has recently completed a securitization transaction worth 250 million rupees with IFMR Capital. Closed on August 18th, IFMR Capital’s latest transaction Delta Pioneer IFMR Capital 2010, is backed by 35,560 microloans originated by Janalakshmi, a microfinance NBFC (Non-Banking Financial Company).

This takes the total funding facilitated by IFMR Capital for this sector to more than 2.1 billion rupees and has also brought a new class of investors in its folds, the NBFCs.The securitised instruments have been issued in the form of senior, AA(so) rated securities, subscribed by a new bank treasury and one of the largest NBFC , and an unrated subordinated piece subscribed by IFMR Capital.

As in all transactions till date, IFMR Capital is a primary investor with investment in the subordinated piece, signalling its commitment to connecting high-quality institutions with capital markets. Through this structure and IFMR Capital’s investment in the subordinated piece, a new, more reliable and cost-effective window of funding has been opened for Janalakshmi.

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Janalakshmi Financial Services is reported to be operating in in six cities with around 100,000 clients and has outstanding loans of 85 million rupees. Over the next year, it plans to extend operations into 35 cities, with outstanding loans of 300 million rupees.

Promoted by IFMR Trust, Chennai based IFMR Capital connects high quality Microfinance Institutions (MFIs) and institutions lending to Small & Medium Enterprises (SMEs) and small farmers with investors in existing and emerging debt capital markets.

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(Disclaimer: By arrangement with Microfinance Focus. All copy rights reserved by Microfinance Focus. International Business Times is not responsible for any omissions or commissions in the article.)