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Our Bureau

Visakhapatnam, Dec. 26 SKS Microfinance Private Ltd has made rapid strides in the north-coastal districts of Srikakulam, Vizianagaram, Visakhapatnam and East Godavari during the past five months of its operations and disbursed Rs 26 crore to 50,000 members, according to Mr K.V. Rao, Vice-President.

At a press meet here on Wednesday, he said the company “gives loans up to Rs 12,000 to members without any collateral security, to be repaid over 50 weeks in weekly instalments. A further mid-term loan of up to Rs 4,000 will be given to members after 25 weeks.”

The maximum amount would be Rs 20,000, with the effective rate of interest being 24 per cent. An emergency loan of Rs 2,000 would also be given to members without any interest, he said. He said the non-banking finance company was borrowing from commercial banks at 12.5 per cent and lending at 24 per cent.

To a question whether it was not on the higher side, he replied that even the Finance Minister, Mr P. Chidambaram, had opined that microfinance companies could go up to 28 per cent, considering the high cost of funds and the operating costs. “Our margin is hardly two per cent,” he said.

He said SKS, which was growing at a compounded annual rate of 17 per cent, was one of the best in the country.

“We have our presence in 20,000 villages in 15 States, with more than 1.4 million members across the country. Till now, the cumulative disbursement is Rs 1,566 crore and outstanding amount Rs 660 crore,” Mr Rao said.

More Stories on : Rural Development | Credit Market | Andhra Pradesh

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