Hyderabad, Feb 27 (IANS) SKS Microfinance Limited, India's only listed microfinance institution (MFI), has sold another Rs.354 crore off its loan book to a leading public sector bank, paving the way for deploying the proceeds for fresh loans to the poor.

The Hyderabad-based company Monday said it has obtained sanction for assignment of a rated pool of Rs.354 crore from a major public sector bank.

This is the largest rated pool assignment transaction in the Indian microfinance history, it said

SKS has already drawn the first tranche of Rs.78.7 crore comprising receivables from micro women borrowers from the weaker sections, as defined by the Reserve Bank of India.

The pool is rated as A1+(SO) (highest safety) by credit rating company Care. Instruments with a CARE A1+ (SO) rating are considered to have a strong capacity for timely payment of short-term debt obligations and carry the lowest credit risk, SKS said in a statement here.

Pool receivables are identified from 18 states other than Andhra Pradesh. The pool is well diversified with a single branch accounting for less than one percent of the pool, with the average loan amount being Rs.10,717.

Our ability to consummate the largest rated pool assignment in the Indian microfinance history clearly demonstrates that funding concerns raised post the AP MFI Act are behind SKS Microfinance, said S. Dilli Raj, chief financial officer, SKS Microfinance Limited.

This transaction is SKS Microfinance Limited?s eighth assignment/securitisation transaction post the Andhra Pradesh MFI Act.

Earlier this month, SKS completed another rated pool assignment transaction for Rs. 243 crore.

SKS was among microfinance institutions hit by a crisis after Andhra Pradesh passed MFI Act in 2010 to rein in lending by MFIs to poor borrowers following allegations of harassment.

Following the enactment, SKS' recoveries in the state fell to five percent and overall loan book shrunk by over 60 percent from Rs.5,000 crore in September 2010 to Rs.1,800 crore by December 2011.