SKS Microfinance, an Indian microfinance institution (MFI), recently was directed by the Supreme Court of India, the country’s apex court, to plead its case against the enforcement of the Regulation of Microlending Act of the Indian state of Andhra Pradesh (AP), in front of the AP High Court, the state’s apex court. The Regulation of Microlending Act was passed in December 2010 in response to complaints of high interest rates and coercive loan recovery practices by MFIs and their agents. SKS Microfinance has objected to the Act, stating that by requiring approval of every microloan application by state government authorities, it causes an undue burden on business.
As of 2010, SKS Microfinance reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) 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 Nisha Koul, Research Associate
About SKS Microfinance: SKS Microfinance is a microfinance institution (MFI) that was launched in 1998. It delivers microfinance products through a group-lending model to impoverished women in India as a for-profit, non-banking finance company. SKS converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. Its 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 US-based nonprofit data provider Microfinance Information Exchange (MIX), SKS Microfinance holds 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.
Sources and Additional Resources:
Business Line, “AP MFI Act: No apex court relief for SKS,” http://www.thehindubusinessline.com/industry-and-economy/banking/article2491054.ece?homepage=true&ref=wl_home
MicroCapital.org story, May 23, 2011, “MICROCAPITAL BRIEF: Supreme Court Schedules Hearing on Petition Filed by SKS Microfinance Against Over Regulation of Moneylending Act of India’s State of Andhra Pradesh,” https://www.microcapital.org/microcapital-brief-supreme-court-schedules-hearing-on-petition-files-by-sks-microfinance-against-over-regulation-of-moneylending-act-of-indias-state-of-andhra-pradesh/
MicroCapital.org story, May 19, 2011, “MICROCAPITAL BRIEF: Confusion Continues Over Regulation of Microfinance Institutions (MFIs) in India, State of Andhra Pradesh May Adjust Law to Reconcile With Federal Rules,” https://www.microcapital.org/microcapital-brief-confusion-continues-over-regulation-of-microfinance-institutions-mfis-in-india-state-of-andhra-pradesh-may-adjust-law-to-reconcile-with-federal-rules/
MicroCapital.org story, August 1, 2011, “MICROCAPITAL BRIEF: Indian Microfinance Institution SKS Reports Quarterly Loss, Looks to Raise $200m Through Private Placements,” https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-sks-reports-quarterly-loss-looks-to-raise-200m-through-private-placements/
MicroCapital Universe Profile: SKS Microfinance, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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