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SKS is currently reaching over one lakh (1,00,000) villages in India with a presence in 15 states and 1,256 branches. SKS has begun leveraging this extensive branch network and its financing ability to provide more financial services to the bottom of the pyramid. In this direction, SKS undertook initiatives like mobile handset financing, financing loans against gold collateral and solar lamps financing program.
 A majority of families in rural India use kerosene lamps to light up their homes. As rural homes are poorly ventilated, prolonged exposure to the fumes and harmful particles emitted by such lamps poses a serious threat to the health of women and children who spend most of their time indoors. To tackle this problem, SKS Microfinance Limited has partnered with d.light solar to make solar lamps available to its members. A loan product has been designed to facilitate finance for the purchase of solar lamps. SKS Microfinance Limited has piloted the initiative in 10 branches across two states, disbursing 2,700 loans to its borrowers. The pilot expansion is estimated to reach 475 branches spread across nine states of North and East Zones by the end of this financial year. This initiative has not only brightened the homes of SKS Microfinance Limited’s borrowers but has also made them more healthy for their families.
As of March 31, 2013, our Gold Loan portfolio stood at Rs. 55.9 crore, which represented 2.4% of our total outstanding loan portfolio as of March 31, 2013. We intend to operate our Gold Loan business through a subsidiary, subject to successful results from the pilot project and receipt of the required regulatory approvals |
India has a high potential in the mobile telephony market, but the high cost of mobile handsets is a key deterrent for rural borrowers of SKS. Considering this, SKS has launched a mobile finance program that offers its borrowers mobile phones at a relatively lower price with the option of paying in small, easy installments. SKS has partnered with Nokia India Pvt. Ltd. to supply quality handsets to its borrowers. A loan product has been designed to facilitate finance for handset purchases. Under this program, SKS has disbursed 3.5 lakh mobile loans to its borrowers in six states of India. This initiative has instilled confidence in its borrowers and improved their business through better access to communication.
India is one of the largest consumers of gold in the world due to a strong preference for gold jewellery among Indian households and its widespread use as a savings instrument. During Fiscal 2011, we launched a Gold Loan pilot under the name of ‘Swarnapushpam’ in order to provide personal or business loans to our members for meeting their short-term liquidity requirements. These loans are secured by gold jewellery. The pilot was extended to 40 branches, primarily across the states of Karnataka, Maharashtra and Uttar Pradesh in India. As of March 31, 2013, we had 198 employees working at these 40 branches. Loan amounts range from Rs. 2,000 to Rs. 100,000. Loan repayments can be made in full at maturity, as bullet payments, equated monthly instalments or quarterly instalments and the maximum tenure may be up to 12 months at the option of the borrower. In addition, there are no penal or pre-closure charges and the borrower can choose to make partial prepayments. The annual effective interest rate for the Gold Loans typically varies between 18.5% and 25%, and is determined based on the loan-to-value ratio, tenure of the loan and the repayment frequency. As such, our Gold Loan products do not qualify as micro-credit products.