The Hindu Business Line : Investors pump $11.5 m into SKS Microfin

Mumbai March 29 Number of investors led by Sequoia Capital have invested $11.5 million (Rs 50.6 crore) in the equity of SKS Microfinance. The funds will go to provide financial services to over 5 million poor families by 2010, said a company release.

The other investors in the company include Unitus Equity Fund, Mr Vinod Khosla, Mr Ravi Reddy, Odyssey Capital and SIDBI. Financial break-up of the investments was not available.

Personal Consumption

"Our company caters only to women," said Mr Vikram Akula, Chief Executive Officer, SKS Microfinance, at a press conference held here today. Mr Akula said, " Women are better entrepreneurs and unlike men do not utilise the money for personal consumption. They are more responsible and work better in a group."

SKS Microfinance, a non-banking finance company, extends 75 per cent of its funds to the rural population with 25 per cent going to the urban population living in tier II and tier III cities. The company charges an average interest of 25-30 per cent per annum based on a weekly repayment scheme. It has presence in 11 States and now plans to set up base in Kerala and Punjab.

"SKS has created a model whereby leading global private equity firms like Sequoia feel confident in channelling capital into the hands of the poor. This is significant as it will encourage more commercial capital to come into microfinance," said Mr Akula.

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