SKS Microfinance Ltd's dues on loans in Andhra Pradesh for the last five months have mounted to Rs 1,250 crore, according to its Chief Executive Officer, Mr M. R. Rao.

“We have a provisioning policy in place and are making provisions. The repayments in 18 others States where we operate are up to 98 per cent,” Mr Rao, told Business Line here on Tuesday.

When asked on the efforts to recover the dues, Mr Rao said: “Our loan officers are visiting the villages every day in strict adherence to the law in AP. Before October 2010, the repayments in AP were 99 per cent. But this repayment culture appears to have gone now.”

The business operations of the country's only listed and largest MFI came to a standstill along with other MFIs in AP after the row over alleged harassment of clients by MFIs and the subsequent legislation put in place by the State Government to regulate MFIs in October 2010.

The exact impact of business hit in AP on the Hyderabad-based company's top and bottom lines would only be known after the declaration of the fourth quarter and full-year results some time in May.

Andhra Pradesh accounts for over 25 per cent of SKS' total outstanding loan portfolio. As it is ‘business as usual' in other markets, SKS was able to raise funds. “We have almost frozen securitisation deals for about Rs 700 crore,” he added

DE-RISKING

On the strategy to minimise the impact of business loss in AP, Mr Rao said a mapping of potential and risk in States other than AP was being done. “Our exposure to other States has been growing. Going forward we hope to have a balanced exposure in all regions, say, 10 per cent from each State,” Mr Rao said.

The fresh hiring of field staff has also been frozen. “We are actually sitting on surplus staff in AP. In line with our HR policy, there are no retrenchments. But we are not hiring,” the SKS functionary said.

SKS Micro's scrip gained 2.83 per cent to end at Rs 561.90 on the Bombay Stock Exchange on Tuesday.

Related Topics
comment COMMENT NOW