SKS Micro securitises Rs 243 cr of receivables

India’s only listed micro-lender SKS Microfinance on Monday said that it has securitized Rs 243 crore of receivables from borrowers outside of Andhra Pradesh.

According to SKS, the transaction is rated A1+(SO) by rating company Care indicating a strong capacity for timely payment of short-term debt obligations.

The news gave a fillip to the stock of SKS and pushed it up nearly 10 per cent to the upper circuit at Rs 98.20 on Bombay Stock exchange today.

Mr S Dilli Raj, chief financial officer, SKS Microfinance said, “SKS delivered all its promises to the credit-granting community through the painful transition phase, post the AP MFI Act. Now, it is time to reap the fruits of consolidation.”

The rated pool comprises receivables from 3,22,312 woman borrowers from the weaker sections as defined by the Reserve Bank of India, the company said.

“The pool is well diversified with a single branch accounting for less than one per cent of the pool, with the average loan amount being Rs 11,131,” a company statement said.

Prior to this transaction, the company had completed six securitizations post the AP MFI Act. All the rated papers have shown robust collection efficiency of more than 98 per cent.

Credit enhancement has not been utilised in any of these structures, it added.

SKS Microfinance appoints Ombudsman

SKS Microfinance Ltd today said it has appointed Mr Verghese Jacob as its Ombudsman with immediate effect and also created toll-free helpline in eight Indian languages.

Mr M.R. Rao, Managing Director and Chief Executive Officer, SKS Microfinance, said Mr Verghese will help the company set new benchmarks of excellence in customer protection and grievance redressal.

“The appointment of Mr Verghese Jacob as our Ombudsman showcases SKS Microfinance Ltd’s commitment to continue its pioneering customer protection and grievance redressal initiatives including its constant vigil on process, system and regulatory compliance and customer awareness programmes over the years,” Mr Rao said in a statement.

Mr Verghese said global and Indian development experts know that only microfinance can ensure that the fruits of liberalisation reach the less privileged in rural India and they also feel that microfinance has to reinvent itself to surpass regulatory prescriptions on customer protection and grievance redressal.

“I am confident SKS Microfinance Ltd will live up to such expectations and set new benchmarks in governance and customer protection,” the new ombudsman of SKS said.

Mr Verghese has over 30 years of experience spanning the corporate and social sectors. In the corporate world, he had held senior executive and board level positions with groups such as the Godrej, IBS, ACCEL, KVK etc. He also served as the Chairman of Bombay Round Table, the statement added.

SKS Microfinance shares were trading at Rs 89 apiece on the BSE in the early trade today.

SKS Micro posts Rs 428-cr loss

SKS Microfinance Ltd has posted a net loss of Rs 428 crore in the third quarter ended December 31, 2011.

The Hyderabad-based company had earned Rs 34 crore net profit in the corresponding quarter of previous financial year.

The loss was due to Rs 358.66 crore provisions and write-offs made during the period under review, largely on account of Andhra Pradesh Microfinance crisis.

“In the absence of virtual certainty of future taxable profits supported by convincing evidence, the net deferred tax asset amounting to Rs 353 crore as at December 31, 2011, has not been recognised,” SKS said in its un-audited financial results communicated to the Bombay Stock Exchange on Thursday.

The total revenue decreased to Rs 83.82 crore (Rs 384 crore).

The company's disbursals and collections were hit in Andhra Pradesh, its main market, since the enactment of Andhra Pradesh Microfinance (Regulation of Moneylending) Act, 2010.

During the quarter, SKS founder, Mr Vikram Akula stepped down as Executive Chairman and Director of the company.

Mr P. H. Ravi Kumar, Independent Director, took over as the Non-Executive Interim Chairman of the company in November 2011.

SKS scrip rose 0.70 per cent to end at Rs 93.55 on the Bombay Stock Exchange on Thursday.

nagsridhu@thehindu.co.in

SKS Microfinance to raise FII investment limit to 74%

SKS Microfinance, India's only listed microlender fighting a cash crunch, said on Wednesday its shareholders approved raising the investment limit of foreign institutional investors in the company to 74 percent from 24 percent.

Battered down shares in SKS rose 5 percent to 98.40 rupees following the news.

Earlier this month, SKS said it plans to raise a maximum of 5 billion rupees ($97.25 million) through a share sale to institutional investors by March 2012.

Source: EconomicTimes

SKS Microfinance plans to prune micro-lending exposure

HYDERABAD: SKS Microfinance, India's only listed microfinance lender, has announced a derisking strategy wherein it plans to significantly prune down exposure, over the years, to the microfinance sector that has plunged into crisis over the past year or so.

The micro lender has decided to reduce its exposure to microfinance in terms of assets, revenues and profits, said chief executive officer MR Rao and CFO Dilli Raj at a media conference in Hyderabad on Wednesday . The company will launch a wholly-owned subsidiary for its non-microfinance business.

It expects this business, which would largely focus on meeting the needs of existing microfinance borrowers, to help derisk operations from microfinance. "By March 2013, we expect to bring down our exposure to microfinance in terms of assets to 90% from nearly 100% now.

In terms of revenue, the exposure will come down to 80% and in profit terms, it will come down further to around 70%," said Dilli Raj.

Source: EconomicTimes

SKS faces collection problems in West Bengal, Gujarat

SKS Microfinance Ltd, which has been hit by the Andhra Pradesh microfinance crisis, is now facing collection-related problems in parts of West Bengal and Gujarat.

“Due to local and process-related issues the collections in some districts in West Bengal and Gujarat have dropped to about 86 per cent,” Mr M. R. Rao, Managing Director and Chief Executive Officer of SKS, told newspersons here on Wednesday.

Earlier, these States had over 92 per cent collections.

West Bengal is the third largest market for the Hyderabad-based company which operates in 18 States.

On the exact reasons for the problem, he said issues involving commission agents were among them.

The problem is now seen in five districts of West Bengal and three in Gujarat.

“We have been dealing with these kinds of issues from time to time,” he said.

SKS has 8.71 lakh and 2 lakh clients in West Bengal and Gujarat, respectively, of a total client-base of about 62 lakh. Of this, 19.25 lakh clients are in Andhra Pradesh alone.

WRITE-OFFs in AP

The company is likely to adopt a phased-approach in writing off the Andhra Pradesh portfolio which has been classified as non-performing, in line with the Reserve Bank of India norms.

“We still have time to write-off the residual risk exposure of about Rs 337 crore. We will exercise flexibility,” Mr Dilli Raj, Chief Financial Officer, SKS said.

From October last year to end of September this year, the company had written off Rs 485 crore.

The only-listed MFI in the country, which posted a loss of Rs 385 crore in the second quarter ended September 30, 2011, is hoping to be profitable by the end of financial year 2013.

This would be done by expanding the non-Andhra Pradesh portfolio and increasing the revenue from non-microfinance business such as gold loan, funding to grocery stores, mobile-phone finance and sale of insurance, he added.

A separate subsidiary for gold loans is likely to be formed next financial year. It also plans to put an upper cap of 3 per cent on the return on assets after operations turn profitable.

SKS hopes to raise at least Rs 400-500 crore as part of its proposed Qualified Institutional Placement before end of March next year.

The company's scrip on Wednesday gained 4.97 per cent on Bombay Stock Exchange to end at Rs 112.95.

nagsridhu@thehindu.co.in