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Highlights
Operating Achievements. SKS has more than tripled its loans outstanding and more
than doubled clients served while retaining excellent portfolio
quality.
Fundraising Success. SKS has raised over $900,000 (Rs. 430 lakhs) in foreign
equity investment and grants to capitalize SKS Microfinance, a new
for-profit provider of basic financial services.
Institutional Development. SKS was independently rated last quarter by Micro-Credit
Ratings & Guarantees India Ltd. (M-CRIL) and received an
excellent rating of alpha minus. In January 2003, Vikram Akula, CEO,
presented at the End Poverty Foundation's "Improving Microfinance
Practice" conference in Delhi, where SKS was recognized as one of
India's leading MFIs due to its employment of international Best
Practice standards, particularly for its Management Information
Systems, Internal Audit, and Human Resources procedures.
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Operational
Achievements
SKS's focus on efficient processes
and management systems allowed rapid growth without any
compromise in portfolio quality:
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Growth. In the past year, loans outstanding more than tripled (from $283,088 (Rs. 13,588,225) to $1,051,648 (Rs. 49,427,470). Total clients also increased from 5,808 clients to 13,519 clients for the same period.
Productivity. Each loan officer currently manages an average of 410 clients and loans outstanding of $31,868 (Rs. 1,497,802) compared to 187 clients and loans outstanding of $9,132 (Rs. 438,330) one year ago.
Profitability. Operating self-sufficiency was 86.6% and financial self-sufficiency was 74.9% for fiscal year 2003, compared to 38.7% and 32.9% for fiscal year 2002.
Portfolio Quality. Portfolio-quality remains excellent with portfolio-at-risk > 30 days of 0.0%.
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Fundraising
Success
SKS is spinning off its microfinance operations to SKS Microfinance Ltd. ("SKSM"), which will be a for-profit, cost-efficient non-banking finance company ("NBFC") that will provide basic financial services to poor women in rural areas of India. SKSM will be professionally managed, profitable, and owned and governed by all stakeholders including clients, management, employees and social investors. SKS has raised approximately $900,000 (Rs. 430 lakhs) in foreign equity investment and grants to capitalize the NBFC.
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Case
Study: Raipally Siddamma
Siddamma is among the most entrepreneurial members of SKS Microfinance. She has taken four income-generating loans for a wide range of activities and has secured many assets. In her first year, Siddamma took a loan of Rs. 1,500 (US $32) for rearing a goat. She then took a Rs. 2,000 (US $43) loan for vegetable vending. Still later, Siddamma took a Rs. 6,000 (US $129) loan to purchase a mango tree, the fruit of which she sells each mango season. Finally, Siddamma took a loan to buy fishing nets and to contract three fishermen to catch her daily fish, which her husband then sells in a nearby city. Through this combination of enterprises, Siddamma has netted huge profits. She now earns Rs. 100 (US $2.12) profit per day. This is remarkable considering that, as a former agricultural laborer, she barely earned Rs. 20 (US $ 0.42) each day.
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