SKS Microfinance, the best known microfinance company in the country and the only one listed on the bourses, seems to be slowly pulling itself out of the crisis that had engulfed the entire sector. It results for the March quarter released today show an 11 per cent quarter on quarter growth in the non-
Andhra Pradesh portfolio.
Andhra Pradesh matters because it was a law by that state in 2010 imposing numerous controls on
microfinance companies operating there that led to the crisis. Borrowers in the state took the development to mean they need no longer repay their loans to microfinance institutions, while across the country banks took fright and drastically reducing lending to these institutions. Most of these institutions tumbled into the red.
SKS Microfinance's March quarter results show that at least outside Andhra Pradesh, the situation is improving. SKS now has a cash balance of Rs 669 crore, a net worth of Rs 435 crore and capital adequacy of 35.4 per cent. "Neither solvency nor liquidity is an issue now," says S. Dilli Raj, its chief financial officer. Though it is still not profitable, Dilli Raj says the company should be back in the red by the second quarter of 2012/13.
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