Debt securitization is a financial process in which illiquid financial assets, typically loans or receivables, are pooled together and converted into marketable securities that can be sold to investors. The primary purpose of securitization is to transfer the credit risk of the underlying assets from the originator, usually a bank or financial institution, to the investors while also improving liquidity and freeing up capital for further lending. In a typical securitization process, the originator identifies a portfolio of similar debt instruments such as mortgages, auto loans, or corporate loans and transfers them to a special purpose vehicle (SPV). The SPV then issues securities backed by these pooled assets, which can include different tranches with varying levels of risk and return. Investors receive payments derived from the cash flows generated by the underlying debt, such as principal and interest payments. Debt securitization offers several benefits, including diversification of funding sources, reduction of balance sheet risk, and improved capital efficiency. It also allows financial institutions to manage interest rate and credit risks more effectively.