In 2013-14, SKS Microfinance, the first and only listed microfinance institution (MFI) in India, hopes to post profit.
MR Rao, Managing Director and Chief Executive Officer of the firm said the focus of the company was on profitable growth with efficiency and not just on scaling up. It may be recalled that the MFI posted profits during Oct-Dec 2012 after seven straight quarters of losses. Profit of the firm stood at Rs 1.15 crore in three months to December 2012.
He also feels that the environment for microfinance industry has improved much now with banks willing to lend to the sector.
During 2013-14, the firm aims to disburse around Rs 2,800 crore credit and expects to attain a return on equity of 15 percent, which should translate into around Rs 60 crore of profit during this period, agency reports suggest.
Between Apr-Dec 2012, the firm disbursed around Rs 2,100 crore of loan. The microfinance major was severely hit in the aftermath of the legislation passed by Andhra Pradesh government in October 2010.
The company’s operations in Andhra Pradesh had struggled after the state regulations stipulated stringent procedures in lending to borrowers, mostly poor, in the semi-urban and rural pockets. The ordinance also made it mandatory for people to borrow from only one MFI, hitting the sector hard.
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