Udaia Kumar, the managing director of SHARE Microfin Limited, a non-banking financial institution in India, was reportedly paid a salary of INR 74 million (USD 1.6 million) for the fiscal year ending March 2010. The salary exceeds the limit stipulated by the Companies Act, a law which regulates the operations of firms in India. The act states that a company is not allowed to pay more than 5 percent of its net profit to a director without government permission. A significant portion of Mr Kumar’s salary comprises “sweat equity”, which are shares issued at zero cost to the recipient [1]. The 2008-2009 salary of Mr Kumar of INR 81 million (USD 1.7 million) also exceeded the limit set by the Companies Act, but Share Microfin obtained approval from the Ministry of Corporate Affairs for the surplus pay.
While heads of Indian microfinance institutions (MFIs) such as SKS Microfinance and Spandana Sphoorty Financial earned significantly lower salaries of INR 17 million (USD 370,000) and INR 14 million (USD 300,000) respectively in 2009-2010, Mr Kumar’s wife, Mrs Vidya Sravanthi, the managing director of another MFI, Asmitha Microfin Limited, was paid a salary of INR 32 million (USD 700,000) [1].
As of 2009, SHARE Microfin reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 576 million, a gross loan portfolio of USD 376 million, approximately 2.4 million borrowers, return on assets (ROA) of 5.5 percent and return of equity (ROE) of 45.1 percent.
As of 2009, Asmitha Microfin reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 389 million, a gross loan portfolio of USD 315 million, approximately 1.3 million borrowers, return on assets (ROA) of 4.3 percent and return of equity (ROE) of 40 percent.
By Medha Ravi, Research Associate
About Share Microfin:
SHARE Microfin Limited is a microfinance institution (MFI) based in Hyderabad, India. It began operations in 1989 as a nonprofit. It converted into a non-bank financial institution in 2000. Mr M Udaia Kumar is the Founder and Managing Director of SHARE Microfin Limited, and his wife Mrs Vidya Sravanthi is the managing director of Indian MFI Asmitha Microfin Limited. SHARE offers loans—primarily to women—as well as training and consulting to microentrepreneurs. As of 2009, SHARE Microfin reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 576 million, a gross loan portfolio of USD 376 million, approximately 2.4 million borrowers, return on assets (ROA) of 5.5 percent and return of equity (ROE) of 45.1 percent.
About Asmitha Microfin Limited:
Asmitha Microfin Limited is a microfinance institution (MFI) based in Hyderabad, India. It offers collateral-free group and individual loans to women. It was founded in 2002 and operates primarily in rural areas. It is registered as a “Public Limited Company.” In October of 2008, MicroCapital reported the purchase of a minority stake in Asmitha by BlueOrchard Private Equity, the private equity arm of BlueOrchard Microfinance Investment Managers. Mrs Vidya Sravanthi is the managing director of the Asmitha Microfin Limited, and her husband Mr M Udaia Kumar is the Founder and Managing Director of SHARE Microfin Limited. As of 2009, Asmitha Microfin reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 389 million, a gross loan portfolio of USD 315 million, approximately 1.3 million borrowers, return on assets (ROA) of 4.3 percent and return of equity (ROE) of 40 percent.
Source and Resources:
[1] Economic Times article, “Share Microfin MD takes home 7.4 cr, more than double HDFC Bank MD’s salary” http://economictimes.indiatimes.com/news/news-by-industry/jobs/share-microfin-md-takes-home-74-cr-more-than-double-hdfc-bank-mds-salary/articleshow/7401434.cms
MicroCapital.org story, February 7, 2011, “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”, https://www.microcapital.org/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-sphoor/
MicroCapital.org story, October 13, 2010, “MICROCAPITAL BRIEF: India’s SHARE Microfin in Talks with Asmitha Regarding Merging in Advance of Initial Public Offering (IPO)”, https://www.microcapital.org/microcapital-brief-indias-share-microfinance-in-talks-with-asmitha-regarding-merging-in-advance-of-initial-public-offering-ipo/
MicroCapital.org story, September 23, 2010, “MICROCAPITAL BRIEF: Lokesh Kumar Singh of Sanchetna Financial Services on Corporate Governance in the Indian Microfinance Industry”, https://www.microcapital.org/microcapital-brief-lokesh-kumar-singh-of-sanchetna-financial-services-on-corporate-governance-in-the-indian-microfinance-industry/
MicroCapital.org story, June 21, 2010, “MICROCAPITAL BRIEF: Second Annual Unitus-Hewitt Compensation And Benefits Survey of Indian Microfinance Institutions Demonstrates Salary Stability”, https://www.microcapital.org/microcapital-brief-second-annual-unitus-hewitt-compensation-and-benefits-survey-of-indian-microfinance-institutions-demonstrates-salary-stability/
MicroCapital’s Microfinance Universe Profile: SHARE Microfin Limited, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SHARE+Microfin+Limited
MicroCapital’s Microfinance Universe Profile: Asmitha Microfin Limited, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asmitha+Microfin+Limited
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
Similar Posts:
- MICROCAPITAL BRIEF: Soleco, Deetken, IDB Deliver “Women in Solar” Training in Jamaica
- MICROCAPITAL BRIEF: Okra Solar of Nigeria Raises Equity, Debt Totaling $12m to Expand Mesh Grids in Africa, Americas, Asia
- MICROFINANCE EVENT: Unlocking Solar Capital (USC) Africa; May 31 – June 1, 2023; Kampala, Uganda
- MICROCAPITAL BRIEF: Impact Asset Management’s Dual Return Vision Microfinance Funds Lend to MFIs in India, China
- MICROCAPITAL BRIEF: ADB Issues $8.5m Bond to Fund On-lending to Women, Agricultural MSMEs in Azerbaijan
