India: SKS Micro To Raise Funds For Expansion
By Paritosh Gajjar, Deal Curry
SKS Microfinance Limited is planning to raise R3500Cr to fund its expansion. The money would be procured in the form of debt from banks and financial institutions over a period of year as stated by CFO S. Dilli Raj of the company.
In the last quarter of last fiscal, the MFI had received an incremental debt funding of R1360 Cr and a capital relief of R135 Cr following a securitization transaction.
In February this year, it sold off R243 Cr worth of loans to a bank for extending loans and had raised R100 Cr loan from SIDBI in the same month.
The company had planned to raise R900 Cr through the QIP route last year in July but no development was seen thereafter.
SKS Microfinance Limited (SKS) is a non-banking finance company (NBFC) and operates across 19 states of India. It has over 2,400 branches and more than 77 lakh members. As on 31st December 2010 amount disbursed by SKS stood at R21,431 Cr.
India has around 800 MFIs, which include firms incorporated as NBFCs, non-governmental organizations and trusts.
Another MFI Janalakshmi Financial Service raised R65 Cr from Citi Venture Capital International led investor consortium in June last year. This year’s fund raise by MFIs include Incofin Investment Management investing R13 Cr in Annapurna Microfinance in June and ACCION International and Pragati India Fund investing $4.5 Mn in Bihar’s Saija Finance in the same month.
In December last year, the RBI proposed an upper limit of 26% for annual interest rates on loans to individuals and it is expected to ease some norms pertaining to MFIs net worth, capital adequacy and provisioning needs which would help the sector come out of crisis.