Microfinance

Time to Take the Credit,
Article in Economic Times Corporate Dossier dated 30 March 2007, page 2

There are now 10,000 microfinance institutions lending an average of less than $300 to 40 million poor borrowers worldwide.

Procredit, made up of 19 microfinance banks in countries from Moldova to Ecuador was established in 1998 by International Financial Institutions. It is now wildly successful, boasts over 2.2 million customer accounts and arrears by volume of a miniscule 1.2%.

Still only a fraction of the world's 500 million impoverished micro entrepreneurs hve access to the financial system.

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SKS Micro announces Rs 50 cr equity infusion,
New items in Economic Times, dated 30 March 2007, Page 13

Hyderbad based SKS Microfinance, announced an equity infusion of rs 50 cr by PE fund Sequoa Capital and other. This will take networth of the institution to Rs. 70-75 cr.

Presently this organization has a client base of 6 lakh (0.6 million) women borrowers, locted across 7,200 villages in 11 states. The additional capital will help it to serve another 5 lakh (0.5 million) borrowers. It charges an interest rate of 25%. cost of borrowing presently is 11.5%. profit margin expected is 2%.

As per the SKS's lending model, only women borrowers are elgible for loans, on an individual basis.

Mr. Vikram Akula, promoter, said that the MFI will require at least Rs. 500 cr over the next three years. According to him the total demand for funds in the micro finance space would be around $50 billion. Of this only $5 billion is being presently provided.