Pickup in credit demand for NBFC, HFC led to strong securitisation volume: Icra

According to ratings agency ICRA, a strong uptick in loan demand might push securitization volumes, which were mostly created by non-bank financial companies (NBFCs) and housing finance companies (HFCs), to approximately Rs. 33,000 crore (US$ 4.15 billion) in the first quarter of FY23.

The increase reflects a 1.9 times jump compared to Rs. 17,200 crore (US$ 2.16 billion) of securitised assets in the first quarter of FY22, and a 4.4 times increase compared to Rs. 7,500 crore (US$ 943.88 million) in the first quarter of FY21, mainly driven by overall macroeconomic stability, which resulted in robust credit growth for NBFCs and HFCs.

Mortgage-backed loan securitization accounted for 46% of all securitization volumes, followed by the vehicle loan segment with 26%, and microfinance with 11%. The number of originators who securitised their assets in the first quarter of FY23 increased sharply to 70 from 46 in the first quarter of FY22.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.