>> December 21, 2008
Definition of Securitisation
Securitisation is the process of getting cash on the basis of different security notes and papers .Even some company issues shares or debenture for getting fixed assets , this is also securitisation . In simple english securitisation create the relationship of company with outer world in which company gets fund for doing work .
Benefit of Securitisation
- Increase the rate of return
- Raise of fund or finance through securitisation when other source are not supported .
- I take one example explaining the third benefit
suppose a person want to purchase a building for giving it rent , if he purchases with his cash then all risk of fund is his own . But if he takes loan to make building then he becomes issuer of finance so from earning of building , he can pay the debt of building . This is the real power of securitisation.
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