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After being hit by the AP Microfinance Act, SKS Microfinance Ltd is now faced with employees exiting the company.
When contacted, Mr V. Srinivas Reddy, Executive Vice-President HR, SKS Microfinance, told Business Line that, lately, 621 employees on an average have been leaving the company every month.
“There has been no significant change in the company's attrition levels in recent times,” Mr Reddy added.
At present, SKS has 22,111 permanent employees on its rolls across the country.
The Hyderabad-based, only listed MFI in the country has been hit badly in Andhra Pradesh since October 2010, which then accounted for 28 per cent of the total portfolio of company's outstanding portfolio of about Rs 4,570 crore.
It is mostly the middle- and lower-level staff who are leaving, an employee who quit SKS recently told Business Line . The staff in these cadres fear job loss after the company posted a net loss of Rs 70 crore in the fourth quarter, he added.
The resignations have been triggered by the frequent talk of cost-cutting by the management and the expected loss of a significant chunk of business in AP.
As on March 31, 2011, SKS had an outstanding loan portfolio of Rs 1,287 crore in AP, while in the non-AP regions it was at Rs 2,861 crore.
According to Mr Alok Prasad, CEO of MFIN (Microfinance Institutes Network), before the October 2010 crisis “there was very little attrition as the sector was very attractive. The morale of the field staff was hurt after uncertainty due to the AP MFI Regulation Act, leading to higher attrition.”
EXCESS STAFF
The resignations could as well be a blessing in disguise for SKS which had indicated that the adverse effect of the AP Act could linger for two more quarters.
In a press conference a couple of weeks ago, Mr Vikram Akula, Founder-Chairman of SKS, said that there was no retrenchment but fresh hiring had been halted. About 600 field staff were virtually jobless in AP.
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