Indian microfinance institution (MFI) SKS Microfinance Limited recently completed two securitizations totaling INR 2.3 billion (USD 41.2 million), reportedly bringing the company’s total to 12 securitizations worth INR 12.1 billion (USD 220 million) during 2012 and 2013. The buyers of the securities were not disclosed. S Dilli Raj, chief financial officer of SKS, reportedly commented, “Securitization is emerging as the preferred instrument of confluence for financial inclusion as it amalgamates the funding capability of banks with the credit delivery skills of Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) like SKS Microfinance Limited.”
The company’s total funding inflow from the 2013 financial year was INR 31.5 billion (USD 574 million), compared to the INR 14.3 billion (USD 269 million) raised in the 2012 financial year.
As of September 30, 2012, SKS reported total assets of USD 354 million and a gross loan portfolio of USD 250 million disbursed to approximately 3.9 million borrowers. As of March 2012, SKS reported return on assets (ROA) of -45.8 percent and return on equity (ROE) of -111 percent. SKS trades on the Bombay Stock Exchange and India’s National Stock Exchange.
By Nicole Boyd, Research Associate
About SKS Microfinance
SKS Microfinance is a for-profit microfinance institution (MFI) that was launched in 1998. SKS converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. It since diversified into offering gold loans and microinsurance services but does not accept deposits. As of September 30, 2012, SKS reported total assets of USD 354 million and a gross loan portfolio of USD 250 million disbursed to approximately 3.9 million borrowers. As of March 2012, SKS reported return on assets (ROA) of -45.8 percent and return on equity (ROE) of -111 percent. SKS trades on the Bombay Stock Exchange and India’s National Stock Exchange.
Sources and Additional Resources:
Business Standard. “SKS Microfinance concludes two securitisation transactions,” http://www.business-standard.com/article/companies/sks-microfinance-concludes-two-securitisation-transactions-113040100106_1.html
MicroCapital. March 3, 2013, “MICROCAPITAL BRIEF: 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, “MICROCAPITAL BRIEF: SKS Microfinance of India Completes $10m Securitization, Stock hits 52-Week High,” https://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-completes-10m-securitization-stock-reaches-52-week-high/
MicroCapital. December 2, 2012, “MICROCAPITAL BRIEF: SKS Microfinance of India Announces $36m Securitization Under Amended Reserve Bank of India Guidelines,” https://www.microcapital.org/microcapital-brief-sks-microfinance-of-india-announces-36m-securitization-under-amended-reserve-bank-of-india-guidelines/
MicroCapital. March 23, 2012, “MICROCAPITAL BRIEF: India’s SKS Microfinance Completes Securitization Deal Totaling $63m,” https://www.microcapital.org/microcapital-brief-indias-sks-microfinance-completes-securitization-deal-totaling-63m/
MicroCapital. February 29, 2012, “MICROCAPITAL BRIEF: SKS Microfinance Completes Securitization Deals Totaling $122m,” https://www.microcapital.org/microcapital-brief-sks-microfinance-completes-securitization-deals-totaling-122m/
MicroCapital Universe Profile: SKS Microfinance
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
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