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• Investment by a mainstream investor signals vote of confidence in microfinance.
• SKS Microfinance leads evolution of MFI sector, strengthens capital adequacy.
• Bajaj Allianz sees opportunity to invest in socially-relevant sector, improve share-holder value.

Pune - July 02, 2009 :Bajaj Allianz, one of India's leading insurer offering general and life insurance products, has announced a strategic investment of INR 50 crore ($10 million) in SKS Microfinance, India's largest microfinance institution.

The equity deal claimed to be the first-ever investment by an insurance company in an Indian microfinance institution (MFI) and signals an important step in the evolution of SKS Microfinance, one of the fastest-growing MFIs in the world.

Announcing this milestone, SKS Microfinance Founder and Chairperson Dr. Vikram Akula said, "An investment in SKS by a mainstream investor such as Bajaj Allianz is a vote of confidence in the company and in microfinance. Investment from a leading private insurer gives SKS greater stability and credibility, as well as a stronger capital base to extend our reach to serve more poor customers."

MFIs traditionally start off as non-profit organizations and then convert to non-banking finance companies in order to achieve scale. In the initial phase, they attract financing from development banks followed by venture capital and private equity funds. Investment from Bajaj Allianz, marks the next phase in the evolution of microfinance as a safe and mainstream asset class.

SKS Microfinance and Bajaj Allianz Life Insurance partnered in April 2008 to launch India's first micro-insurance product for the rural poor.

"We are happy with SKS and its unique business model that makes it an ideal vehicle for serving customers at the bottom of the pyramid. It is also in line with our objective of providing security and protection to the most disadvantaged sections of the society through micro-insurance products," said Kamesh Goyal, Country Manager, Allianz & CEO Bajaj Allianz Life Insurance. Mr Goyal added that the investment follows rigorous due diligence which has created confidence that the investment would generate shareholder value and help build a secure society.

With this investment, SKS Microfinance will further improve its Capital Adequacy Ratio requirements. In recent months, SKS Microfinance has introduced a range of mainstream financial instruments into microfinance. It has issued Non-Convertible Debentures worth INR 250 million that were fully subscribed by YES Bank and also completed a rated pool securitization deal worth INR 1 billion (the pool was rated P1+ by Crisil signifying 'highest safety'). SKS also issued Commercial Papers worth INR 250 Million and tied up with Standard Chartered to raise Rs 750 million from the Debt Capital Market and became the first MFI to list its debt security raising the bar on 'accountability'.

SKS Microfinance currently has a membership base of 4.5 million households and has cumulatively disbursed loans worth over Rs. 8,000 crore. It has staff strength of 14,249 across 1,439 branches in 19 Indian states.

About SKS Microfinance

SKS Microfinance is a non-bank finance company (NBFC) whose mission is to eradicate poverty by providing financial services to the poor. Established in 1998, SKS Microfinance is India's largest and one of the world's fastest growing microfinance organizations with an annual growth rate of 188 per cent. It currently serves 4.4 million clients across 60,000 villages and slums in 19 states and has disbursed Rs. 7,917 Crore in loans with a 99 % repayment rate. SKS also provides life and health insurance to its clients.

SKS has received numerous awards including the Young Global Leaders by World Economic Forum, CGAP Pro-Poor Innovation Award, the ABN-AMRO/Planet Finance Process Excellence Award, Citibank Information Integrity Award, the Digital Partners SEL Award and the Grameen Foundation USA Excellence Award. Business Week has recently named SKS as one the Top 5 emerging and influential companies in the world. It was founded by Vikram Akula, who was named by TIME magazine as one of the 100 Most Influential People in the World (2006).

About Bajaj Allianz Life Insurance Company Ltd.:

Bajaj Allianz is one of the leading Private Sector life & general insurance companies in India. Bajaj Allianz is a union between Allianz SE, the world's leading insurer and Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited, one of India's most respected names). Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world, managing assets worth over a Trillion Euros (over Rs. 55,00,000 crores).

At Bajaj Allianz, customer delight is our guiding principle. Ensuring world class solutions by offering you customized products with transparent benefits supported by the best technology is our business philosophy.

Bajaj Allianz began its operations in 2001 and today has a pan-India presence with over with offices and presence in over 1100+ towns in the country. The companies have been constantly expanding its operations to be close to their customers.

Bajaj Allianz Life Insurance has developed insurance solutions that cater to every segment and age-income profiles. Currently Bajaj Allianz has a strong product portfolio of over 30 flexible products and caters to all kinds of customer needs from ULIPs to Child plans, from group insurance to health insurance. There are further simple and need-based products in the pipeline. In 08-09, Bajaj Allianz Life Insurance was the only life insurance company to generate profits of Rs.45 crores. The company has 7.4 million in-force policies and the Gross Written Premium was Rs.10624 crores.

Bajaj Allianz General Insurance is one of the leading private general insurance companies in India and is offering various general insurance products like motor insurance, home insurance, health insurance and also unique insurance plans such as wedding insurance, Event Insurance, Film insurance.

Bajaj Allianz General Insurance has received a rating of "iAAA", which is the highest rating for claims paying ability from ICRA Limited (an associate of Moody's Investors). This rating has been affirmed for the last two years consecutively.

As on 31st March 2009, the company garnered Rs.2649 crores, a growth of over 10% over the last year. During the year, the company once again emerged as the only private general insurance company to cross Rs.100 crore mark in Profit before Taxes by generating Rs.150 crores. The company issued over 7.6 million policies which reflect our capability to handle volumes and strong infrastructure. The company also paid claims worth Rs.1980 crores in the fiscal 08-09.