SKS Microfinance Forays into Punjab
Oct '2009
  • SKS Microfinance operates across 19 states
  • Has empowered 53 lakh poor households
  • Reaches out to 62,000 villages across India

Chandigarh, October 26, 2009: SKS Microfinance Pvt. Ltd., India’s largest microfinance and the fastest growing microfinance in the world, has expanded its operations in Punjab. Currently SKS operates across 19 states reaching out to 53 lakh poor households across 62,000 villages.

“In keeping with the vision of playing a vital role in financial inclusion, we have started our operations in Punjab as there are approximately 22 lakh people living Below Poverty Line, with a credit demand of Rs 1,168 crore. In Punjab we have started our operations in Malout, Mansa, Chandigarh, Bhatinda, Sangrur and Patiala,” said M R Rao, COO, SKS Microfinance.

SKS Microfinance, a Non-Banking Finance Company regulated by Reserve Bank of India, uses a lending model that was developed by Nobel Prize winner, Muhummad Yunus of the Grameen Bank in Bangladesh. The system involves forming groups of women who serve as guarantors for each other, thus enabling SKS to provide loans without taking any collateral from borrowers. SKS provides income generation loans for a duration of 50 weeks, where the member pays easy weekly repayments against the loan. SKS also offers its member Swayam Shakti Suraksha – a micro-insurance where the member pays Rs 20/- per week and at the end of 5 years gets Rs 5000/-. In case of accidental death, the nominee of the member gets Rs 10,000/-.

In a significant step towards affirmative action, SKS recruits its staff from the same social background that it serves its members.  SKS employee base is 17,520 of which with 25 per cent belong to OBCs, 19 per cent to Scheduled Castes, 3 per cent to Schedule Tribe and 14 per cent to Backward Castes.

Over 90% of SKS staff is the field staff, who are tenth standard pass outs. They are trained for two months and are also taught computer skills. At SKS Microfinance, growth opportunity is very good. On completion of training, the FA is allocated centers where he starts operating.  Promotions and growth opportunities being good, he moves into a desk job at the branch office in approximately one year.  He is then exposed to other roles at the branch like accounting, administration etc

Once he has gained enough exposure to all roles, the Field Assistant gets to head a branch and thereafter to head a Unit. The Branch Manager gets a CTC of Rs 1.2 lakh; a Unit Manager gets a CTC of Rs 3.5 lakh.