Securitisation is a viable funding method for small finance companies because their advances generally match banks' requirements towards priority sector lending, said Mr N. Sampath Kumar, executive director (Finance), Ashok Leyland Finance.
At a meeting organised by the South India Hire Purchase Association on the possibilities of small finance companies using securitisation, Mr Sampath Kumar was optimistic about its potential.
The potential of securitisation - the pooling of assets, already financed, for re-sale - rests on the fact that most finance companies lend to small transport operators and agriculturists, areas that banks are mandated to lend to to meet priority sector commitments.
