SKS Microfinance, an Indian for-profit MFI, recently announced the sale of securitized loans worth INR 6.1 billion (USD 135 million), in an effort to increase liquidity amidst a funding shortage that is one part of the turmoil in the microfinance industry in the Indian state of Andhra Pradesh.
The securitized loans sold by SKS comprise of two elements: INR 5.5 billion (USD 122 million) sold in two tranches to banks and INR 600 million (USD 13.3 million) sold to a non-banking financial company (NBFC). The names of the buyers remain unspecified.
According to 2010 data from the US-based nonprofit Microfinance Information Exchange (MIX), SKS Microfinance has total assets of USD 1.2 billion, a gross loan portfolio of USD 1.2 billion, approximately 6.6 million borrowers, return on assets (ROA) of 6.3 percent and return on equity (ROE) of 22.4 percent.
By Medha Ravi, Research Associate
About SKS Microfinance:
SKS Microfinance is a microfinance institution (MFI) that was launched in 1998 and delivers microfinance products through a group-lending model to impoverished women in India. It is a for-profit, non-banking finance company that 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. According to 2010 data from the US-based nonprofit data provider Microfinance Information Exchange (MIX), SKS Microfinance reported total assets of USD 1.2 billion, a gross loan portfolio of USD 1.2 billion, approximately 6.6 million borrowers, return on assets (ROA) of 6.3 percent and return on equity (ROE) of 22.4 percent.
Source and Resources:
Reuters news article, “SKS Microfinance sells 6.1 bln rupees securitised loans”, http://in.reuters.com/article/2011/03/29/idINIndia-55954120110329
MicroCapital.org story, March 22, 2011, “MICROCAPITAL BRIEF: Indian Banks Collaborate on Restructuring Loans to Microfinance Institutions (MFIs), SKS Opts Out”, https://www.microcapital.org/microcapital-brief-indian-banks-collaborate-on-restructuring-loans-to-microfinance-institutions-mfis-sks-opts-out/
MicroCapital.org story, April 1, 2011, “Funding Shortage Continues in Indian State of Andhra Pradesh, Loans Overdue to SKS Microfinance Total $27m”, https://www.microcapital.org/microcapital-brief-funding-shortage-continues-in-indian-state-of-andhra-pradesh-loans-overdue-to-sks-microfinance-total-27m/
MicroCapital’s Microfinance Universe Profile: SKS Microfinance,
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SKS+Microfinance
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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