SKS Microfinance, India`s largest and world`s fastest growing microfinance institution, has recently completed a unique securitization deal worth Rs 1 billion with Yes Bank.

The transaction the first securitization deal in India to get CRISIL`s highest safety rating - allows the bank to purchase 1, 48,950 micro loans extended to unbanked SC, ST and minorities families identified by the RBI as weaker sections and hence a priority.

Announcing this landmark transaction, S. Dilli Raj, CFO of SKS Microfinance said, ``With this transaction, a new asset class is born. For the first time in the Indian MFI history, a securitized pool is rated P1+ (SO) which is the best possible rating and showcases SKS`s structuring and financial innovation skills.``

The transaction has been assigned with a rating opinion of P1+ SO (very strong safety) by CRISIL (A Standard & Poor`s company) following an analysis of over 1 million loans extended by SKS. The assignment transaction is credit enhanced with extra collateralization and cash margin, which are subordinated to payouts to YES Bank. The pool is geographically diversified across more than 10 states. The pool has net seasoning of 6.5 weeks and the average ticket size is Rs 8, 900. SKS will service the pool contracts as the servicing agent.

This is yet another step forward in financial inclusion and is indicative of the excellent asset quality of SKS. Structured products like securitization will enhance access to capital and accelerate social benefits, commented Suresh Gurumani, CEO and MD of SKS Microfinance.

Unitus Capital acted as advisor for the transaction. SKS Microfinance has in recent times announced a series of innovations in fund raising including many firsts like weaker section pool securitization deal with ICICI, non convertible debentures and commercial papers worth Rs.250 million each. All of these are aimed at expanding the funding options available to MFIs.

SKS Microfinance currently has a member base of 4 million and has cumulatively disbursed loans worth Rs 6 5 billion. It has 1373 branches across 18 Indian states.

Shares of Yes Bank gained Rs 2, or 3.87%, to settle at Rs 53.65. The total volume of shares traded was 1,339,256 at the BSE (Thursday).