Cash-starved NBFCs, HFCs raise Rs 73,000 cr in Q3 by securitising SME loans

Domestic securitisation market volumes touched all-time high of Rs 1.44 trn during the nine months to December 2018, as compared to Rs 84,000 crore for the entire fiscal 2018

In urgent need of funds, non-banking finance companies (NBFCs) and housing finance companies (HFCs) sold retail and SME loans worth Rs 73,000 crore in October-December 2018 mostly to banks through securitisation, according to rating agency Icra. 

The liquidity from the market almost froze in the aftermath of defaults by IL&FS and group firms in the second quarter ended September 2018. This forced Non-banking finance companies and HFCs to liquidate part of their existing loans to generate funds to meet redemption requirements and also partly finance growth in future, analysts said.