ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Microfinance: Productive Linkages

Productive Linkages In a deal that is the largest of its kind in the world, ICICI Bank recently securitised US $ 4.3 million of the outstanding loan portfolio of SHARE Microfin, a microfinance institution (MFI) that operates in rural areas of Andhra Pradesh. Securitising a loan essentially means converting a financial claim into a marketable security that can be traded as an asset in capital markets. Grameen Foundation USA provided the cash collateral for the deal, an amount that is approximately 93 per cent of the guarantee required by ICICI Bank. All the new loan portfolios of SHARE will be turned over to ICICI under this scheme; the bank will receive payments from borrowers directly, while SHARE will act as the collection agent. ICICI

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