SKS Microfinance is reportedly scaling up its non-core businesses of financing Samgam stores, which are retail grocery stores owned by poor women, and increasing its gold lending operations in efforts to diversify its revenue stream.
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MICROCAPITAL BRIEF: Commercial Banks, Private Equity Investors Reevaluate India’s Microfinance Sector in Light of Draft Microfinance Bill
Since the Indian government released a draft microfinance bill in July 2011, commercial banks and private equity investors reportedly have expressed a new willingness to consider investing in microfinance institutions (MFIs).
MICROCAPITAL BRIEF: Indian Microfinance Institution Satin Creditcare Reports $22m in Capital Raises, Securitizations; Upgraded by CARE Ratings to “MFI 2”
Satin Creditcare Network Limited (Satin), a microfinance institution (MFI) headquartered in Delhi, recently announced that it received an upgraded credit rating from India-based CARE Ratings following a fundraising streak totaling INR 1 billion (USD 22.3 million).
MICROCAPITAL BRIEF: Indian Microfinance Institution SKS Reports Quarterly Loss, Looks to Raise $200m Through Private Placements
SKS Microfinance, a publicly-listed Indian microfinance institution (MFI), recently reported a net loss of INR 2.18 billion (USD 48.1 million) for the quarter ending June 30, compared to a net profit of INR 669 million (USD 14.3 million) in the same period last year.
MICROCAPITAL BRIEF: Indian Microfinance Institution (MFI) Janalakshmi Raises $14m in Equity Led by Citi Venture Capital International (CVCI)
Janalakshmi Financial Services (JFS), an Indian microfinance institution (MFI), has raised INR 65 crores (USD 14 million) through a third round of equity capital fundraising. Citi Venture Capital International, a US-based private equity investor affiliated with Citigroup, has taken a “significant minority stake” in JFS that reportedly represents its first investment in India since 2008.
MICROCAPITAL BRIEF: SKS Microfinance Reconsidering Business Strategy to Rebuild Reputation
SKS Microfinance, a microfinance institution (MFI) that serves groups of impoverished women in India, is reportedly considering new business growth avenues in an attempt to increase revenue and improve its reputation. Along with collateral-free loans, four new products would be offered: loans using gold as collateral, housing loans, loans to buy mobile phones and loans to local grocery stores in a supply arrangement with the cash-and-carry chain, Metro. “The pilot projects have been yielding very encouraging results,” says Vikram Akula, chairperson and founder of SKS Microfinance.
MICROCAPITAL BRIEF: Paper Gains on Early Investment in SKS Microfinance Largely Evaporate For Sequoia Capital
Since its initial investment in SKS Microfinance, an India-based microfinance institution (MFI), Sequoia Capital, a US-based venture capital firm, has experienced significant gains on paper followed by partial losses of those gains.
MICROCAPITAL BRIEF: Costs Rise for Indian Microfinance Institutions (MFIs) Looking to Securitize Loan Portfolios From 10% to Over 12%
Indian microfinance institutions (MFIs), which have struggled to procure loans from commercial banks since turmoil struck the microfinance industry in Andhra Pradesh in November 2010, have found that raising money by securitizing even their higher-quality loan portfolios has become more expensive.
MICROCAPITAL BRIEF: Suresh Gurumani, Director of India’s SKS Microfinance, Resigns
India’s SKS Microfinance, a microfinance institution (MFI) that loans to impoverished women in India, has reported that Suresh Gurumani has resigned from his post as director of the company’s board.
MICROCAPITAL BRIEF: To Counter Liquidity Crunch in India, Grameen Koota, Bandhan, SKS Securitize Loans Disbursed to Women
Microfinance institutions (MFIs) in India are reportedly securitizing more of the loans they disburse to women in order to raise capital they would likely have borrowed from banks before the liquidity crunch that has affected the microfinance sector since late 2010.
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: Indian Banks Collaborate on Restructuring Loans to Microfinance Institutions (MFIs), SKS Opts Out
Indian banks that have disbursed loans to microfinance institutions (MFIs) have reportedly prepared a blueprint for restructuring these loans. Under the proposal, Indian microfinance institutions (MFIs) would be given a maximum of ten years to repay loans to financial institutions at an interest rate of 12 percent. The loans that would be restructured under the proposal are estimated to total INR 130 billion (USD 2.8 billion) [1].
MICROCAPITAL BRIEF: Imp-Act Consortium Announces Release of Social Performance Management (SPM) Guidance Notes
Imp-Act Consortium, a member-based organization that focuses on social performance in microfinance, recently released the “Social Performance Management Guidance Notes”, which consists of four publications that include guidance on implementing operational strategy, internal control, risk management and staff incentives in microfinance institutions (MFIs) while incorporating social performance.
MICROCAPITAL BRIEF: Indian Microfinance Institution Grameen Koota Raises $8m through Nonconvertible Debentures
Grameen Koota, a division of Grameen Financial Services Private Limited, has raised INR 35 crore (USD 7.71 million) of debt capital through the issuance of secured, redeemable, nonconvertible debentures (NCDs) to Developing World Markets Limited, a member of US-based asset manager and investment bank Developing World Markets (DWM) Group.