MICROCAPITAL BRIEF: India’s SKS Microfinance Seeks to Go Paperless with IBM MobileFirst Tablet System

SKS Microfinance Limited, a for-profit microfinance institution (MFI) headquartered in Hyderabad, India, recently partnered with IBM MobileFirst, the mobile division of US-based information technology company International Business Machines (IBM), in an effort to improve staff productivity in acquiring customers, completing loan disbursements and collecting repayments [1][2]. The project included the deployment of 7,000 tablets mainly in rural and semi-rural areas, a help desk to support staff in using the devices, and a package of software and services to transform processes from paper-based to mobile digital format [3].

By using the tablet system, loan officers reportedly increased their field productivity by 20 percent, while reducing costs [3].

“We have significantly reduced the time required to input information and reduce fatigue among the loan officers. The tablet solution enables us to accommodate growth while simultaneously improving our efficiencies,” said M. R. Rao, CEO of SKS Microfinance [3].

As of September 30, 2015, SKS Microfinance had loans totaling INR 5,847 crore (USD 880 million) outstanding to 4.5 million impoverished women in all states in India, excluding data from Telangana and Andhra Pradesh [3][4]. After the downturn in the microcredit industry that began in 2010 in Andhra Pradesh, SKS Microfinance’s loan portfolio in Andhra Pradesh and neighboring Telangana crashed. This issue has not been resolved as of its latest earnings update, dated October 2015, wherein SKS Microfinance published its financials without data from these two states [4] [5] [6] [7].

By Kevin van den Brink, Research Associate

About SKS Microfinance Limited

SKS Microfinance is a for-profit microfinance institution (MFI) that was launched in 1998 in India. SKS converted into a public limited company in May 2009 and launched an initial public offering on July 28, 2010. It has since diversified into offering gold loans and microinsurance services but does not accept deposits. As of September 30, 2015, SKS Microfinance had loans totaling INR 5,847 crore (USD 880 million) outstanding to 4.5 million impoverished women in all states in India, excluding data from Telangana and Andhra Pradesh. Shares of SKS Microfinance trade on the Bombay Stock Exchange and India’s National Stock Exchange.

About IBM

International Business Machines (IBM) is a multinational computer, technology and consulting corporation headquartered in the US state of New York. IBM manufactures and sells computer hardware and software and offers a variety of infrastructure, hosting and consulting services. For 2014, IBM reported USD 98.4 billion in total revenue, USD 16.5 billion in net income and USD 126.2 billion in total assets.

[1] The Hindu Business Line, News, Digital push: SKS Micro, IBM MobileFirst team up (http://www.thehindubusinessline.com/money-and-banking/digital-push-sks-micro-ibm-mobilefirst-team-up/article7916361.ece)

[2] LiveMint, News, SKS Microfinance partners with IBM MobileFirst to go paperless (http://www.livemint.com/Companies/jm5FIUaJwnZ8ofDDzkC5MM/SKS-Microfinance-partners-with-IBM-MobileFirst-to-go-paperle.html)

[3] International Business Machines (IBM), News, SKS Microfinance Limited transforms operations with IBM MobileFirst solution (http://www-03.ibm.com/press/in/en/pressrelease/48173.wss)

[4] SKS Microfinance Limited, News, Q2-FY16 Earnings Update (https://www.sksindia.com/downloads/Earnings%20Update%20Q2%20FY16L.pdf)

[5] SKS Microfinance Limited, News, Annual Report 2014-2015 https://www.sksindia.com/downloads/SKS%20AR%20FY15.pdf

[6] SKS Microfinance Limited, News, SKS Microfinance Limited Analyst Meethttps://www.sksindia.com/downloads/Analyst%20Meet%20Transcript%20Q4FY15.pdf

[7] MICROCAPITAL BRIEF: Intellecap Publishes White Paper Analyzing Events Leading Up to Andhra Pradesh Microfinance Lending Crisis and State, Media Responses to the Crisis https://www.microcapital.org/microcapital-brief-intellecap-publishes-white-paper-analyzing-events-leading-up-to-andhra-pradesh-microfinance-lending-crisis-and-state-media-responses-to-the-crisis/

[8] MICROFINANCE PAPER WRAP-UP: Microfinance in India A Crisis at the Bottom of the Pyramid Published by Legatum Ventures?https://www.microcapital.org/microfinance-paper-wrap-up-microfinance-in-india-a-crisis-at-the-bottom-of-the-pyramid-published-by-legatum-ventures/

MicroCapital Universe Profile: SKS Microfinance Limited

MicroCapital Universe Profile: IBM

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