MICROCAPITAL BRIEF: India’s SKS Microfinance Responds To Associated Press Article on Suicides in Andhra Pradesh, Calls Allegations “Baseless”
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Monday, March 19, 2012

MICROCAPITAL BRIEF: India’s SKS Microfinance Responds To Associated Press Article on Suicides in Andhra Pradesh, Calls Allegations “Baseless”

In reference to the report ‘Lender’s own probe links it to suicides,’ by US-based news service Associated Press (AP), Indian microlender SKS Microfinance, has issued a statement expressing that the allegations that its lending practices may have contributed to customer suicides are “baseless” and simply re-state earlier allegations from 1.5 years prior. J S Sai, executive vice president of public affairs at SKS Microfinance, states that the company has been exonerated in 14 out of 15 of cases brought so far with one case still pending. Further, the document maintains that the board had not authorized any private investigation into the highly-publicized suicides in late 2010 in the Indian state of Andhra Pradesh. SKS Microfinance announced in December 2011 that it plans to integrate customer protection principles into its business model.

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. As of December 31, 2011, SKS reports total assets of USD 3.89 million a gross loan portfolio of USD 3.41 million, approximately 4.3 million borrowers, return on assets (ROA) of -66.10 percent and return on equity (ROE) of -152.48 percent.

By Natalie Baer, 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. They have recently diversified, and also provide gold loans, funeral assistance, and store loans. 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. SKS currently trades on the Bombay Stock Exchange. As of December 31, 2011, SKS reports total assets of USD 389,370,524, a gross loan portfolio of USD 341,123,257, approximately 4,303,000 borrowers, return on assets (ROA) of -66.10 percent and return on equity (ROE) of -152.48 percent.

Sources and Additional Resources:

[1] SKS Issues Clarification on the Associated Press Report http://www.microfinancegateway.org/p/site/m/template.rc/1.1.14482/

MicroCapital story, March 13, 2012, “MICROCAPITAL BRIEF: Small Industries Development Bank of India (SIDBI) Requires SKS Microfinance to Lend Only Outside Andhra Pradesh” http://www.microcapital.org/microcapital-brief-small-industries-development-bank-of-india-sidbi-requires-sks-microfinance-to-lend-only-outside-andhra-pradesh/

MicroCapital story, February 28, 2012, “MICROCAPITAL BRIEF: 76 Criminal Cases Pending Over Alleged Role of Microlenders in Borrower Suicides in India’s Andhra Pradesh” http://www.microcapital.org/microcapital-brief-76-criminal-cases-pending-over-alleged-role-of-microlenders-in-borrower-suicides-in-indias-andhra-pradesh/

MicroCapital story, February 27, 2012, “MICROCAPITAL BRIEF: Internal Documents Collected by Associated Press Implicate SKS Microfinance Staff in Borrower Suicides in Andhra Pradesh, India” http://www.microcapital.org/microcapital-brief-internal-documents-collected-by-associated-press-implicate-sks-microfinance-staff-in-borrower-suicides-in-andhra-pradesh-india/

MicroCapital Universe profile: SKS Microfinance http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

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