Business Standard

SKS Microfinance eyes Rs 60 crore profit next fiscal

The microfinance institution also aims to disburse around Rs 2,800 crore credit in FY14

Related News

After posting profits in the third quarter of after seven straight quarters of losses, country's only listed micro-lender hopes to continue the momentum and is expecting a profit of around Rs 60 crore in the next fiscal.

The microfinance institution also aims to disburse around Rs 2,800 crore credit in FY14, a top company official said.

"We hope to disburse around Rs 2,800 crore next fiscal. Our aim is to attain a return on equity of 15%, which should translate into around Rs 60 crore of profit during this period," SKS Chief Financial Officer told PTI.

SKS has disbursed around Rs 2,100 crore of loan in  he first nine months of the current fiscal, he added.

"Our focus now is on profitable growth with efficiency and not just on scaling up," Managing Director and Chief Executive Officer M R Rao said, adding that the environment for microfinance industry has improved much now with banks willing to lend to the sector.

The microfinance major, which was severely hit in the aftermath of the legislation passed by Andhra Pradesh government in October 2010, reported a profit of Rs 1.15 crore in three months to December after posting losses for seven quarters on the trot.

The company's operations in Andhra Pradesh had struggled after the state regulations stipulated stringent procedures in lending to borrowers, mostly poor, in the semi-urban and rural pockets. The ordinance also made it mandatory for people to borrow from only one MFI, hitting the sector hard.

The company said it has written off around Rs 1,300 crore of its loan in Andhra Pradesh post the crisis, along with limiting its operations by pruning staff in the state--from over 7,000 to jut about 1,400.

According to the company, it has raised Rs 2,150 crore of bank debt in 2012 compared to Rs 950 crore raised in 2011, when the crisis was at its peak.

"After the RBI guidelines on MFIs, bank lending to the sector has resumed," Rao said.

On future, Rao said SKS will continue to remain a core microfinance lender but will also add other portfolios to diversify.

"We will remain as a core micro-lending company. We have already started gold loan in small proportion along with selling of insurance products among others. We also sell mobile handsets, at a discount (Rs 150 apiece).

"Our plan is to have 10% of asset from non-MFI activity which will contribute 15% of total revenue and 25% of the profit," Raja said.

Read more on:   
|
|

Read More

OIL, OVL eye SE Africa assets

Oil India Ltd (OIL) and ONGC Videsh Limited (OVL), the foreign arm of Oil and Natural Gas Corp, will make a joint bid to acquire a 10 per cent stake ...

Quick Links

Advertisement

Back to Top