Microfinance Focus, September 2, 2011: Arohan Financial Services Private Limited, a Kolkata based NBFC microfinance company has received a conditional rating of [ICRA]A2(SO) for its PTC Series A1 worth Rs. 7.18 crores, to be issued by Demeter 2011. The transaction is backed by micro loan receivables pool, originated by Arohan.

ICRA believes that the credit support provided has been adequately sized to cover the credit / liquidity risk in the transaction. The rating is based on ICRA’s analysis of the past performance of Arohan’s microfinance loan portfolio and the expected future performance of the selected pool of loans

The conditional rating is subject to the fulfilment of all conditions under the structure, due diligence audit of the pool, review by ICRA of the documentation pertaining to the transaction and Arohan furnishing to ICRA an independent legal opinion on the transaction from the transaction legal counsel.

As on May 2011, Arohan had operations in 147 branches across 23 districts of West Bengal, Bihar and Assam, with a portfolio size of Rs. 69.6 crore. For the year ended March 31, 2011, Arohan reported net profit of Rs. 0.34 crore on total managed assets of Rs. 110.21 crore. The regulatory capital adequacy was at 30.70% (Tier I: 29.00%) as of March 2011 as against that of 15.60% (Tier I: 14.10%) as of March 2010.

The 30+ delinquency level for overall the portfolio of Arohan was 5.17% as on 31 May 2011. There has been an increase in the delinquency levels in recent months on account of overleveraging issues faced by the company in some of the districts of West Bengal.