Asset backed securities basically means a financial security collateralized/secured by a variety of assets like loan, leases, credit card debt, royalties, receivables etc.
This variety/group of assets is actually a group of small and non-liquid assets, which cannot be easily sold individually. They are bonds or notes backed by financial assets. In most cases these assets consists of receivables other than mortgage loans. Asset based security is vastly distinct from other kinds of bonds in which their credit worthiness depends on other sources apart from paying capacity of the owner of the underlying assets. Financial institutions that originate loans including banks, credit card providers, auto finance companies and consumer finance companies turn their loans into marketable securities through a process known as securitization. The loan originators are commonly referred to as the issuers of ABS, but in fact they are the sponsors, not the direct issuers, of these securities. Asset backed securities enables the issuer to generate more cash by issuing these kind of securities which in turn lends wider opportunities to the investors to invest in a variety of income-generating securities.
These assts can be sold only by putting them in a combination, through a process called securitization, which increases their value and makes them marketable. These financial institutions sell pool of loan in order to purchase such assets to solely securitize them.