SKS: Choose Your Community: Media

SKS Microfinance Receives Rs.100 Crore Subordinate Debt from SIDBI

Mar '2010

Sector-building move by SIDBI to strengthen MFIs
Will help MFIs meet Capital Adequacy norms

Hyderabad, March 15, 2010: SKS Microfinance, India’s largest Microfinance Institution in terms of total value of loans outstanding (according to the October 2009 CRISIL report titled India Top 50 Microfinance Institutions), today announced that it has received a Rs.100 crore subordinated debt from one of its existing shareholders, the Small Industries Development Bank of India. This eight-year borrowing represents the first-ever long-term borrowing programme by the microfinance institution. This borrowing will qualify as a Tier-II capital for computation of Capital Adequacy Ratio as per RBI prudential norms guidelines.

This long-term instrument is unsecured and will be repaid at the end of eight years. SIDBI is an early investor in SKS Microfinance and had provided the seed capital for the company in 2005 when it registered with the RBI as a non-deposit taking NBFC.

Announcing the receipt of this funding, Mr. Dilli Raj, Chief Financial Officer, said, "This is a key event for SKS. We thank SIDBI for its proactive leadership role in creating this long-term funding solution to meet the growing capital needs of the MFI sector"

SKS has in the last few months raised capital from Commercial Papers and Non-Convertible debentures.

About SKS Microfinance

SKS Microfinance is a non-banking finance company (NBFC) registered and regulated by the Reserve Bank of India, whose mission is to eradicate poverty by providing financial services to the poor. As per audited results of September 30, 2009, we have served 53 lakh members across 19 Indian states and have a loan outstanding of INR 28,011.08 million in loans with a 99.1 % repayment rate.

SKS operates in the states of Andhra Pradesh, Karnataka, Maharashtra, Orissa, Madhya Pradesh, Bihar, Uttar Pradesh, Rajasthan, Uttaranchal, Himachal Pradesh, Haryana, West Bengal, Jharkhand, Chhattisgarh, Gujarat, Kerala, Tamil Nadu, Punjab and Delhi.

SKS has previously received awards which includes the Social and Corporate Governance Award issued by BSE and Nasscom Foundation for Best Corporate Social Responsibility Practice (2007), Social Performance Reporting Award (MFIs) - Silver Category for Social Performing rating conducted by MIX market (2009). It was founded by Dr Vikram Akula, who is one among the Young Global Leaders selected by World Economic Forum, Business Transformation Entrepreneur of the Year by Ernst & Young (2010). He was named by TIME magazine as one of the 100 Most Influential People in the World (2006).