SKS Microfinance, an Indian non-banking microfinance institution (MFI), recently announced plans to expand its network into Punjab, India. Mr. Rao, COO of SKS Microfinance said “Punjab has approximately 2 [million] people living Below Poverty Line, with a credit demand of Rs 1,168 crore [USD 2.5 million]” [1]. According to a previous statement released by SKS, its expansion into Punjab will take place primarily in urban areas [2].

SKS Microfinance, a non-banking finance company regulated by Reserve Bank of India, provides 50-week loans for income generation in developing societies. Founded in 1997 by Mr. Vikram Akula, SKS’ mission is to provide financial services for the poor. The MFI has provided upwards of USD 1.1 billion in financing, and has maintained a lending book of up to USD 425 million. SKS finances income-generating jobs in the following sectors: agriculture, trade, production, livestock, and new age business. According to the MIX Market, as of March 31, 2009 SKS reported total assets of USD 596.2 million, 3.5 million active borrowers, and a gross loan portfolio of USD 279 million. SKS also reported a debt-to-equity ratio of 3.6, an ROE of 18.7%, and an ROA of 3.7% [3].

For MicroCapital coverage on the microfinance sector in Punjab, please visit:

http://www.microcapital.org/microcapital-story-grameen-foundation-and-women%E2%80%99s-world-banking-express-concern-over-the-potential-crisis-in-punjab-pakistan%E2%80%99s-microfinance-sector/.

By: Diya Chopra, Research Assistant

Bibliography:

[1] Punjab News Line

http://www.punjabnewsline.com/content/view/20225/38/

[2] DNA India

http://www.dnaindia.com/money/report_sks-microfinance-seeks-to-expand-in-north-india_1157581

[3] MIX Market

http://www.mixmarket.org/mfi/sks/data