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

SKS Microfinance, an Indian microfinance institution (MFI), has filed a petition with the Supreme Court of India seeking a stay to prevent the enforcement of the Regulation of Microlending Act issued by the government of the Indian state of Andhra Pradesh.

MICROCAPITAL BRIEF: SKS Microfinance of India Reports Q4 Net Loss of $15m, Cites “Stringent” Loan Loss Provisioning

SKS Microfinance, a for-profit Indian microfinance institution, reported a decline of 36 percent in total income to INR 193.8 crores (USD 42.7 million) and a net loss of INR 69.8 crores (USD 15.4 million) for the first three months of 2011, as compared with a net profit of INR 62.9 crores (USD 14 million) in the same quarter last year.

MICROCAPITAL BRIEF: Representatives of Cambridge, Care, Center for Global Development, SKS Microfinance Discuss “Does Microfinance Help People Escape Poverty?”

Associate director Ms Madeleine Bunting of British newspaper The Guardian recently facilitated a discussion to address the question of whether microfinance helps reduce poverty with Mr Ha-Joon Chang, Cambridge University economist; Mr Ajaz Khan, microfinance advisor for Swiss nonprofit organization Care International; Mr David Roodman, senior fellow at US-based, nonprofit think tank Center for Global Development; and Mr Vikram Akula, chairperson and founder of Indian microfinance institution (MFI) SKS Microfinance [1].

MICROCAPITAL BRIEF: SKS Microfinance of India Sells $135m in Securitized Loans

SKS Microfinance, an Indian for-profit MFI, recently announced the sale of securitized loans worth INR 6.1 billion (USD 135 million), in an effort to increase liquidity amidst a funding shortage that is one part of the turmoil in the microfinance industry in the Indian state of Andhra Pradesh.

MICROCAPITAL BRIEF: Funding Shortage Continues in Indian State of Andhra Pradesh, Loans Overdue to SKS Microfinance Total $27m

London-based news agency Reuters recently reported that since the October 2010 passage of legislation by the state government of Andhra Pradesh in response to the turmoil in the microfinance sector there, funding still remains an issue for microlenders. This is despite efforts by India’s central bank, the Reserve Bank of India, to ease the liquidity crunch. According to Reuters, the issues of mission drift among for-profit players – putting short-term profits ahead of sustainability – and an uncertain regulatory outlook have contributed to the funding shortage [1]. Reuters also states that domestic lenders exercising extra caution when lending to Indian microfinance institutions (MFIs) further deter foreign investors [1].

MICROCAPITAL BRIEF: Vikram Akula of SKS Microfinance Views Recommendations of Reserve Bank of India (RBI) Malegam Committee as Boost to Microfinance

Vikram Akula, chairman of SKS Microfinance, a for-profit microfinance institution (MFI) in India, has stated that the recommendations released by the “Malegam Committee” of the Reserve Bank of India (RBI) in response to unrest in microfinance in the Indian state of Andhra Pradesh, would give a boost to the microfinance sector by further encouraging bank lending to MFIs. Mr Akula also stated that the proposed microloan interest rate cap of 24 percent would not impact SKS Microfinance as its lending rate falls below the cap, but that it would impact smaller institutions that are yet to achieve efficiencies of scale. He viewed this recommendation as a measure to encourage consolidation within the sector.

MICROCAPITAL BRIEF: SKS Microfinance of India Increases Loan Loss Provision, Reports 38% Fall in Quarterly Net Profit

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].

MICROCAPITAL BRIEF: Microfinance Institutions Network (MFIN) of India to Investigate Claims of Improper Handling of Mutual Benefit Trusts (MBTs) by SKS Microfinance, SHARE Microfin and Spandana Sphoorty

The Microfinance Institutions Network (MFIN), a trade association of Indian microfinance lenders, has set up a committee to investigate claims that SKS Microfinance, a for-profit microfinance institution (MFI); SHARE Microfin, a regulated non-banking finance company (NBFC); and Spandana Sphoorty, another for-profit MFI, took advantage of clients through the use of mutual benefit trusts (MBTs) to converting the institutions into for-profit entities.

MICROCAPITAL BRIEF: SKS Microfinance Shares Off 9% Amidst Uncertainty Surrounding Indian Microfinance Sector

Shares of SKS Microfinance, India’s only listed microfinance institution, tumbled to an all-time low on Monday, December 20, as uncertainty surrounding the country’s microfinance sector remained high.

MICROCAPITAL BRIEF: SKS Microfinance of India Under Investigation by Insurance Regulatory and Development Authority (IRDA) for Violating Norms in Insurance Practices

India’s Insurance Regulatory and Development Authority (IRDA) is reported to be investigating SKS Microfinance, a publicly traded microfinance institution (MFI) based in India, for violating norms in its insurance practices.

MICROCAPITAL BRIEF: SKS Microfinance Responds to Probe from Securities and Exchange Board of India on Expulsion of Former CEO Gurumani; Stock Falls Further 6%

SKS Microfinance, a publicly traded microfinance institution (MFI) based in India, confirms that it has received an inquiry from the Securities and Exchange Board of India (SEBI), a government institution whose mandate is to protect the interests of investors, about SKS’s recent expulsion of its former CEO Suresh Gurumani [2].

MICROCAPITAL BRIEF: Indian Government Creates Swavalamban Pension Scheme for the Unorganized Sector, Asks Microfinance Institutions (MFIs) to encourage participation

The Indian Government has launched a pension scheme for workers in the unorganized sector who do not have access to India’s social security net.

MICROCAPITAL BRIEF: CEO of India’s SKS Microfinance Steps Down, Stock Falls 6%

On Monday, October 4, Indian microfinance institution SKS Microfinance announced that its Deputy Chief Executive M.R. Rao would become chief executive and managing director for a three-year, replacing Suresh Gurumani. SKS Microfinance did not provide an explanation for the replacement.