SKS Microfinance Private Limited, an Indian microfinance institution (MFI), launched operations in Kerala, marking it as the fifteen state in which SKS is active. According to SKS Chief Operating Officer M.R. Rao, Kerala has been targeted on SKS’ growth map for a while because of the demographics of its inhabitants, who are largely dependent on fishery and handicrafts as primary sources of income in a state where 360,000 of 1,900,000 total poor households are headed by women.
Operations in Kerala began with two branches in Palluruthy, located in the Ernakulam district and in Thriprayar, located in the Thrissur district. From Palluruthy, SKS will reach out to villages in and around Aroor, Kumbalangy, and Chellanam; and from Thriprayar, it will target villages in Thalikulam, Kodungallur, Anthikkad, Mullassery, Chavakkad, and Cherpu. According to Vice President of SKS Member Services, Mr. K.V. Rao, these two branches have enrolled over 800 members. SKS plans to establish a presence in 1,467 villages across all fourteen districts of the state, by expanding into the districts of Palakkad, Alapuzha, Kollam, Malappuram, and Kottayam in the near future.
SKS Microfinance was established in 1998 in Hyderabad, India, and currently has 601 branches in fifteen states throughout the country. It offers initial loans of up to INR 12,000 (USD 304.3) to groups of members without any collateral, with a loan period of fifty weeks. Loan sizes top out at INR 20,000 (USD 507.2) with an interest rate of 24 percent. SKS also offers emergency loans and loan insurance in the case of client or spouse death, and plans to introduce health insurance produces in the near future.
According to MIX, the microfinance clearinghouse, as of March 31, it has a total loan portfolio of USD 63.2 million, total assets of USD 78.8 million, a debt-to-equity ratio of 379 percent, return on assets (ROA) of 1.75 percent, and return on equity (ROE) of 9.22 percent. MIX also reports that as of March 31, it has 513,108 active borrowers. According to its website, since its inception it has provided over USD 400 million in loans to over 1,300,000 women throughout India. In 2006, SKS achieved a 170 percent growth with an on-time repayment rate of 99 percent. In July 2005, SKS received a rating of alpha by the microfinance rating agency Micro-credit Ratings International, Ltd. (M-Cril). SKS Microfinance is led by Founder and CEO Vikram Akula.
By Mary Fu
Additional Resources:
Moneycontrol.com: “SKS Microfinance launches operations in Kerala”
SKS Microfinance: Background
Bloomberg: Currency Converter
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