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Library » Securitisation: A Funding Alternative for Microfinance Institutions?

Securitisation: A Funding Alternative for Microfinance Institutions?
14 Jun 2005, Schneider, C. & Huttenrauch, H.

Paper presented at Financial Sector Development Conference 2005 investigates the requirements for securitization in emerging markets.

This article discusses the concept of securitization, takes a look at the existing securitization markets and assesses the requirements for the emerging markets.

The paper highlights the following:

Most of the local securitization issuance in emerging markets are backed by residential mortgages, followed by securitizations of tax revenues;
On-shore securitization offers an appealing alternative to cross-border refinancing, since the institution can access local currency funding at matching maturities.

Further, the paper discusses the country specific issues related to securitization and articulates that any legal and regulatory framework for securitization markets to develop and flourish should ensure the following:

The regulation must permit transfer of assets legally from the original lender to a third party;
The legislation must provide for the establishment of an insolvency-remote entity, whose purpose can be strictly limited.

To view related presentation, please visit the link: http://www.microfinancegateway.com/content/article/detail/27935.

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Publisher(s):
Kreditanstalt fur Wiederaufbau