SKS MICROFINANCE LAUNCHES OPERATIONS IN GUJARAT
Strengthens Base in Western India
• Empowers 1.9 M households across 15 Indian states
• Partners mainstream banks by extending unsecured loans worth Rs.1700 crore
• Meets larger social inclusion agenda through members, employees
Hyderabad - Sept 25, 2007
Hyderabad based SKS Microfinance Pvt. Ltd, the new generation microfinance company whose mission is to help eradicate poverty by providing financial services to the poor, has launched operations in Gujarat. SKS started operations in 1998 in the Telangana region of Andhra Pradesh. Today, SKS reaches over 10 lakhs poor households across 16000 villages and slums in 13 states.
Gujarat is the 13th State where SKS has started operations in. It has begun work in Dahod which is among the 200 poorest districts in India. The other districts that feature in this list and that SKS will eventually target are Banaskantha, Dang, Narmada, Panch Mahal and Sabar Kantha. SKS aims to reach 2600 households by March 2008 and 100,000 households by March 2010 in Gujarat.
SKS has disbursed over Rs 1200 crores loans with a 99% repayment and it also provides a life insurance product through the Life Insurance Corporation of India. SKS is one of the fastest growing MFI. Last year SKS registered a 200% growth rate. SKS aims to reach 5 million poor households by 2010.
Announcing the launch of operations in Gujarat, Founder and CEO Vikram Akula said, “while the Gujarat economy has performed well, there are still large numbers of people below the poverty line—an estimated 1 crore. Our goal is to help address this poverty by providing microfinance at the doorstep of the poor so that they can start or expand micro-businesses and earn income.”
SKS not only provides financial services to the poor, but it also employs the poor as field staff. Currently, 92% all SKS’s 3,800 employees are from economically or socially disadvantaged communities. “This has been our biggest success story since we not only give an opportunity to the underserved sections of society to elevate themselves out of poverty but we also generate employment opportunities for the young members who are Intermediate pass in these families. Many of them have grown within the organization and are now heading branch offices,” explains SKS Microfinance VP-Member Services, K.V.Rao.
SKS Microfinance offers loan and insurance products. An income Generating Loan Aarambh is given to the member in the beginning of the 50-week loan period. A Mid-Term Loan Vriddhi is given when the member is 25 weeks into the loan cycle. The maximum loan given out is worth Rs.20,000/- and an effective interest of 28% is applicable. Repayments are on a weekly basis. An emergency loan Raksha worth Rs.2000/- is given free of interest to tide over sudden emergencies in the family like death or hospitalization. Members who successfully complete one loan cycle become eligible to take the Individual Loan Product Sanjeevini which does not require a group guarantee. This loan can be up to Rs.40,000/-
SKS also offers a loan insurance cover for all its members and their spouse. The loan cover fee is 1% of the loan amount and the policy covers the entire loan amount with interest for the term of the loan or one year. In the case of a client or spouse death, the loan amount outstanding is written off and the principal paid is returned to the client’s nominee.