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SKS is conscious of the fact that the funds required for alleviating poverty are available only with commercial funders. It accesses these funds to fulfill its social mission of empowering the poor.

In its efforts to attract commercial funding into the microfinance sector, SKS has been in the forefront. It has raised equity from a wide range of investors – from Government-backed development funds from SIDBI to Angel Investors, Venture Capitalists, Private equity and recently from mainstream financial institutions.

Significantly, Mutual Benefit Trusts representing the interests of the members have a significant share along with employees in SKS. By doing this, SKS ensures that its growth helps its members’ interests and also contributes to the well being of its employees.

Sequoia Capital, Vinod Khosla, SIDBI, Bajaj Allianz, Yatish Trading, Kismet Capital, Sandstone Capital, Silicon Valley Bank and Unitus are among the existing equity partners of SKS Microfinance. SKS Borrowers represented by Mutual Benefit Trusts are also one of the largest shareholder groups in the company.

India’s central bank, the Reserve Bank of India, specifies that non-deposit-taking NBFCs have to have a Capital adequacy Ratio of 15%. SKS maintains a healthy Capital adequacy Ratio of 28.3%.

Ever since it transformed into a for-profit NBFC in 2005, SKS has established a reputation for raising equity and debt to keep pace with its ambitious growth plans. It has set new standards for the sector repeatedly on the amount of equity and debt raised. It has also been instrumental in introducing mainstream financial instruments into microfinance sector.

While funding its growth, SKS has given top priority to maintaining the highest standards in financial transparency. It recently converted from a Private limited Company in order to comply with even more stringent accounting standards. It has won the CGAP award for Financial transparency thrice – in 2004, 2005 and again in 2006. Apart from financial audit conducted by external agencies, SKS also has a strong internal audit team of over 350 members who monitor operations on an on-going basis.

Perational & Financial Information
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Operational InformationFY10FY09FY08FY07
Total no. of Branches2,0291,353770276
Total no. of Districts341307219103
Total no. of Staff21,15412,8146,8182,381
Total No. of Members (in '000)6,7803,9531,879603
Amount Disbursed for the period (INR crores)7,6184,4851,680452
Portfolio outstanding (INR crores)*4,3212,4561,051276
*                includes assigned loan portfolio
Financial InformationFY10FY09FY08FY07
Revenue (INR crores)95855417045
PAT (INR crores)17480172
Assets (INR crores)4,0553,0391,089335
Networth (INR crores)95066421271

SKS Microfinance works on three inter-linked principles to scale microfinance. This includes using a for-profit methodology to access capital, drawing on best practices from the business world to speed growth, and deploying technology to overcome high delivery costs. SKS blends this rigorous business approach with a strong social mission that includes ensuring its members continue to hold a significant stake in the company and ensure that the interests of the members are in the forefront of decision-making.

Ever since SKS transformed into an NBFC it has led the investment cycle of the sector itself. While individual donors supported SKS in its initial years. SKS has since attracted investors from the development sector , angel investors, venture capitalists, private equity and investors from mainstream financial institutions. So firm is the belief in the SKS business model that our initial investors continue to be with us and some have even participated in subsequent rounds of equity raise.

 

Indian Equity

Small Industries Development Bank of India (SIDBI) was established in April 1990, to empower the Micro, Small and Medium Enterprises (MSME) sector with a view to contributing to the process of economic growth, employment generation and balanced regional development. IDBI is the largest share holder of SIDBI, the State Bank of India and Life Insurance Corporation of India follow as the next two large share holders in that order. Since its inception, SIDBI has been assisting the entire spectrum of SSI Sector including the tiny, village and cottage industries through suitable schemes tailored to meet the requirement of setting up of new projects, expansion, diversification, modernisation and rehabilitation of existing units.

Bajaj Allianz Life Insurance is a union between Allianz SE, one of the largest Insurance Companies and Bajaj Finserv. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world, managing assets worth over a Trillion USD. Allianz SE has over 115 years of financial experience and is present in over 70 countries around the world. At Bajaj Allianz Life Insurance, customer delight is the guiding principle. Their business philosophy is to ensure excellent insurance and investment solutions by offering customised products, supported by the best technology.

Yatish Trading is Group Company of J V Gokal Group, which was found in 1952 and having current net worth of INR 3000 Crores (USD 638 million). Their business interest spans across tea, textiles, software and range of financial services. Their priority is always towards credibility and good business practices, thinking long term, investing in and partnering with the right people. Its group companies and associates consist of Chamundi Silks Ltd, Menaka Cotton Ltd, Brics Securities Ltd, Odyssey Capital Pvt Ltd, Wealth Advisors Pvt Ltd and Fortell Solutions Pvt Ltd. It has its operations across India, Hong Kong, Colombo, United Kingdom, Dubai, Moscow, Kazakhstan and also Distribution Tie Ups in 25 Countries.

Foreign Equity

Vinod Khosla

Vinod Khosla is an Indian- American venture capitalist and was a co-founder of Sun Microsystems and Daisy System, where he pioneered open systems and commercial RISC processors. Mr. Vinod serves on the boards of Agami, eASIC, Indian School of Business, Infinera, Kovio, Metricstream, Spatial Photonics, Xsigo and Zettacore. He holds a Bachelors of Technology in Electrical Engineering from the Indian Institute of Technology in New Delhi, a Masters in Biomedical Engineering from Carnegie Mellon University and an MBA from the Stanford Graduate School of Business.

Sequoia Capital India was found by Don Valentine in 1972. Their main operation is in US, with offices across India, Israel and China. Their partners have worked with innovators of companies such as Apple Computer, Oracle, Yahoo, Google and You Tube to name a few. It has had the privilege of being the first venture capital investor and business partner in companies that make up 10% of the NASDAQ's value. Sequoia Capital India manages three funds totaling USD 750million focused on investments in India, across sectors which include Royal Orchid Hotels, Bharti Telesoft, Café Coffee Day, Shaadi.com and ICICI OneSource.

Kismet Capital is a mezzanine and private equity investor in asset-based businesses located in emerging Asian markets. With a focus on opportunities in India and ASEAN countries, Kismet has invested in numerous industries including real estate, hospitality, energy, financial services and contract manufacturing. Kismet was found in 2004 and has operations in New York, Mumbai and Bangkok.

Sandstone Capital has been a long-term investor in public and private companies in India and the subcontinents found in 2005. They employ a disciplined research-driven investment process to invest in deep value opportunities, reasonably-valued growth stocks and special situations. Sandstone believes that, with investors and management teams, there is a need to forge lasting relationships, built upon the values of integrity, trust and mutual respect. Sandstone is one of the largest Indian dedicated funds with a worldwide investor base that includes university endowments, public and private foundations, family offices, individual investors and other institutions.

The Unitus Equity Fund (UEF) is managed by Elevar, a global growth investor focused on the underserved four billion at the base of the pyramid in developing countries. Elevar intends to bridge the gap between these communities and global capital, helping to create a virtuous cycle of opportunity based on open access for all. UEF is a USD 23.6 million equity fund which invests in high growth microfinance institutions. Conceptualised and launched by Unitus in 2006, the Fund has been an active participant in the development of a commercial equity market serving the microfinance industry, with an investment portfolio of six microfinance institutions across India and Latin America. Elevar manages UEF on behalf of Unitus along with successor fund, Elevar Equity II. www.elevarequity.com

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