- Gold loans became the largest securitised asset class in April-June 2024 quarter
- Securitisation issuances rose 22% year-on-year to around Rs 60,000 crore in Q1
- NBFCs originated over 98% of securitisation issuances in the quarter
Gold loans emerged as the largest securitised asset class in the April-June quarter of the current fiscal, overtaking vehicle loans in the country's securitisation market, a report said on Monday.
Securitisation, a process through which lenders pool loans and sell them to investors to raise funds and free up capital for fresh lending, saw issuances surge 22% year-on-year to around Rs 60,000 crore in the April-June quarter, a CRISIL Ratings report said.
The report said more than 98% of the issuances during the quarter were originated by non-banking financial companies (NBFCs), unlike previous peak periods when banks had also contributed significantly.
Gold loans accounted for around 31% of the overall securitisation volume in the first quarter, overtaking vehicle loans, whose share moderated to around 26% because of fewer issuances by a large originator.
"The robust volume indicates NBFCs ramped up recourse to securitisation for raising funds amid sustained credit demand and healthy investor appetite for securitised assets. Specifically, gold loan financiers saw strong portfolio growth and used the direct assignment (DA) route to source funds," CRISIL Ratings Director Deepanshu Singla said.
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