SKS Microfinance (SKS), a for-profit Indian microfinance institution (MFI), recently completed a securitization deal worth INR 2.23 billion (USD 36 million). According to an SKS press release, receivables from loans extended to approximately 300,000 rural women entrepreneurs were purchased by an unnamed public bank in the form of pass-through certificates (PTCs) issued through a special purpose vehicle. The president of SKS, Mr S Dilli Raj, commented that this transaction was the sixth securitization of receivables completed by SKS since April 2013, for a total of INR 9.5 billion (USD 154 million). The transaction frees up liquidity for SKS to use for additional lending or other purposes.
As of March 2013, SKS reported to US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 434 million, approximately 4.3 million borrowers, return on assets (ROA) of -15.8 percent and return on equity (ROE) of -73.4 percent. SKS shares trade on the Bombay Stock Exchange and India’s National Stock Exchange.
By A’kos Szebeni, Research Associate
About SKS Microfinance: SKS Microfinance is a for-profit microfinance institution (MFI) that was launched in 1998 in India. SKS converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. It has since diversified into offering gold loans and microinsurance services but does not accept deposits. As of March 2013, SKS reported to US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 434 million, approximately 4.3 million borrowers, return on assets (ROA) of -15.8 percent and return on equity (ROE) of -73.4 percent. SKS shares trade on the Bombay Stock Exchange and India’s National Stock Exchange.
Sources and Additional Resources:
SKS Microfinance Press Release, “SKS Microfinance completes Rs 222.65 crore securitization,” http://www.sksindia.com/downloads/SKS_completes_222.65_crore_securitization.pdf
MicroCapital, January 2, 2014, “Sequoia Capital Sells 1.75% Stake in India’s SKS Microfinance to WestBridge Capital for $4.7m,” https://www.microcapital.org/microcapital-brief-sequoia-capital-sells-1-75-stake-in-indias-sks-microfinance-to-westbridge-capital-for-4-7m/
MicroCapital, April 11, 2013, “SKS Microfinance of India Completes Two Securitizations Totaling $41m,” https://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-completes-two-securitizations-totaling-41m/
MicroCapital, March 3, 2013, “SKS Microfinance Completes $11.6m Securitization, Its Eighth in a Year,” https://www.microcapital.org/microcapital-brief-sks-microfinance-completes-11-6m-securitization-its-eighth-in-a-year/
MicroCapital, December 17, 2012, “SKS Microfinance of India Completes $10m Securitization, Stock Reaches 52-Week High,” https://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-completes-10m-securitization-stock-reaches-52-week-high/
MicroCapital Universe Profile: SKS Microfinance, https://www.microcapital.org/microfinanceuniverse/tiki-inldex.php?page=SKS+Microfinance
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