Worldwide, microfinance institutions have attracted commercial equity as well as debt investments over the last 10-15 years. A survey of 54 microfinance funders conducted by CGAP in 2008 showed that a total amount of USD 11.7 billion had been committed to microfinance. Approximately 63% of this was in the form of debt and another 6% in the form of guarantees. The distribution between the amount contributed by donors and investors was almost equal at 53% and 47% respectively, thus indicating that both commercial and non-profit investors are equally interested in the market. This paper focuses on the potential of securitisation of microfinance loans in the Indian context and why it makes sense for both Indian and foreign investors to invest in microfinance securities.