SKS Microfinance, a for-profit, publicly traded microfinance institution (MFI) based in India, recently reported total income of INR 3.85 billion (USD 83.8 million) and a 38 percent drop in net profit to INR 341 million (USD 7.4 million) for the period October-December 2010. A 30-percent fall in the share price of SKS has also been recorded since October 2010 [1].
During this period, SKS boosted its loan loss provision to INR 1 billion (USD 21.7 million) from INR 116 million (USD 2.5 million) during the same quarter in the previous year. Approximately INR 587 million (USD 12.7 million) of this provision is allocated to the Andhra Pradesh loan portfolio, and INR 269 million (USD 5.8 million) has been provisioned per guidelines released by the Reserve Bank of India (RBI) in response to the turmoil in microfinance that began in Andhra Pradesh in October 2010. It is unclear if the RBI-inspired sum is a subset of or separate from the INR 587 million figure.
According to 2010 data from the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, SKS Microfinance reported total assets of USD 1.2 billion, a gross loan portfolio of USD 1.2 billion, approximately 6.6 million borrowers, return on assets (ROA) of 6.3 percent and return on equity (ROE) of 22.4 percent.
By Medha Ravi, Research Associate
About SKS Microfinance:
SKS Microfinance is a microfinance institution (MFI), launched in 1998, that delivers microfinance products through a group-lending model to impoverished women in India. It is a for-profit, non-banking finance company, which converted to a public limited company in May 2009 and launched an initial public offering on July 28, 2010. Equity investors include Quantum Hedge Fund, Sequoia Capital, Vinod Khosla, Small Industries Development Bank of India, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus. According to 2010 data from the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, SKS Microfinance reported total assets of USD 1.2 billion, a gross loan portfolio of USD 1.2 billion, approximately 6.6 million borrowers, return on assets (ROA) of 6.3 percent and return on equity (ROE) of 22.4 percent.
About the Reserve Bank of India (RBI):
Established in 1935, the Reserve Bank of India undertakes consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies. The current focus of RBI is to supervise financial institutions, consolidate accounting standards, resolve legal issues in banking fraud, monitor non-performing assets and supervise the rating model for the banking sector. RBI consists of twenty-two regional offices.
Source and Resources:
[1] Reuters News Article: “SKS Microfinance Oct-Dec net down 38.41 pct”, http://in.reuters.com/article/2011/01/24/idINIndia-54363920110124
MicroCapital.org story, January 17, 2011, ” MICROCAPITAL BRIEF: SKS Microfinance Announces Interest Rate Slash in India”, https://www.microcapital.org/microcapital-brief-sks-microfinance-announces-interest-rate-slash-in-india/
MicroCapital.org story, December 13, 2010, “MICROCAPITAL BRIEF: Intellecap Publishes White Paper Analyzing Events Leading Up to Andhra Pradesh Microfinance Lending Crises and State, Media Responses to the Crises”, https://www.microcapital.org/microcapital-brief-intellecap-publishes-white-paper-analyzing-events-leading-up-to-andhra-pradesh-microfinance-lending-crisis-and-state-media-responses-to-the-crisis/
MicroCapital’s Microfinance Universe Profile: SKS Microfinance, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
MicroCapital’s Microfinance Universe Profile: The Reserve Bank of India (RBI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Reserve+Bank+of+India+%28RBI%29
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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