The Fundamental Premise of Securitisation: The Microfinance Case Study

Jul 2010
Bangalore, India, July, 14 2010 - In a recent post in Microfinance Focus, Daniel Rozas and Vinod Kothari have argued that microfinance securitisation does not, in reality, separate ‘pool risk’ from ‘originator risk’ and hence should not be rated very differently from the originator of the portfolio. Some of the arguments are well reasoned out such as the lack of control over co-mingling of cashflows and lack of regulatory supervision on ‘bilateral assignments’. However, some of the other arguments presented beg greater scrutiny.

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