India: SKS Microfin eyes rebound, to expand beyond Andhra
India’s only listed microfinance lender SKS Microfinance, which posted net losses in the previous five quarters, expects to turn profitable in the third quarter of 2012-13, driven by cost reductions and higher lending. The company is also looking to ramp up its presence outside Andhra Pradesh (AP).
“We will be back in black by Q3,” S Dilli Raj, chief financial officer, SKS Microfinance told Hindustan Times.
“With branch consolidation and headcount rationalisation, the cost structure will be optimised and the benefits of cost reduction will start flowing from the second quarter onwards,” he said.
SKS cut down branch count to 1,350 from 2,400 and headcount to 13,000 from 27,000 since the AP crisis in October 2010.
After reports of suicide of borrowers in the state, the AP government had come out with the AP Microfinance Ordinance in October 2010, and later made it into an Act, crippling all MFIs.
In the previous five quarters, the company’s non-AP portfolio declined due to lack of bank funding, an issue, which the company said has been resolved.
By Sachin Kumar, Hindustan Times