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.
SKS is alleged to have collected commissions higher than the permitted 10 percent for agents selling policies. It was also reported that it had violated norms for writing death claims cheques.
As of March 31, 2010, SKS Microfinance had total assets of USD 897 million, a gross loan portfolio of USD 653 million, return on assets of 4.96 percent, return on equity of 21.56 percent and 5.79 million active borrowers.
By Witt Gatchell, Research Associate
About SKS Microfinance:
SKS Microfinance is a microfinance institution (MFI), launched in 1998, that delivers microfinance products through a group-lending model to impoverished women in India. It is a for-profit, non-banking finance company, which converted to a public limited company in May 2009 and launched an initial public offering on July 28, 2010. 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. As of March 31, 2010, SKS Microfinance Private Limited reports to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 897 million, a gross loan portfolio of USD 653 million, a return on assets of 4.96 percent, a return on equity of 21.56 percent and 5.79 million active borrowers.
About Insurance Regulatory and Development Authority (IRDA):
The Insurance Regulatory and Development Authority (IRDA) is the agency in charge of regulating the insurance industry in India. It was formed by the Indian Parliament in 1999. The mission of IRDA is “to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.”
Sources and Additional Resources:
[1] The Hindu, “SKS Microfinance under IRDA scanner” http://www.thehindu.com/business/companies/article913183.ece
MICROCAPITAL BRIEF: Three Agents of SKS Microfinance Arrested in India After Borrower Complains of Harassment
MicroCapital’s Microfinance Universe profile: SKS Microfinance
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
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