SKS Microfinance raises Rs 366 cr PE fund

Hyderabad-based SKS Microfinance, the country’s largest non-banking finance company (NBFC), today claimed to have raised a landmark Rs 366 crore ($75 million), the largest private equity investment to date in microfinance globally.

The SKS, which operates in 18 states providing micro-finance to about 3.3 million poor households across 50,000 villages and slums, has disbursed Rs 4,729 crore ($979 Million) in loans with a 99% repayment rate so far.

According to company release, the new equity investment would help the company to expand its outreach to 8 million members over the next two years.

Vikram Akula, Founder and CEO of the company said: "The fact that this investment has come during the global economic meltdown is proof of the confidence that investors have in SKS—and more importantly of the resilience and entrepreneurial abilities of the poor not only to survive in today's economic crisis but actually to prosper because the poor are largely de-coupled from global trends."

Commenting on the fund raising, S Dilli Raj, Chief Financial Officer, SKS Microfinance said: "Capitalization of this size has a positive impact on leverage and capital adequacy. The impressive net worth of Rs 610 crore ($126 million) further encourages credit extensions from SKS's stable funding partners in the banking system and this will enable us to meet the financial needs of our existing micro-borrowers as well as new borrowers."

The release says that SKS blends its rigorous business approach with a strong social mission that includes ensuring that its members continue to hold a significant stake in the company and benefit from profits that the company earns.

The company has received awards like the CGAP Pro-Poor Innovation Award, the ABN-AMRO/Planet Finance Process Excellence Award, Information Integrity Award, the Digital Partners SEL Award and the Grameen Foundation USA Excellence Award.