PRESENTED BY:- SUBMITTED TO:-SMEET JAIN PROF. RAJESH KIKANI (144154)

Introduction

SKS Microfinance Limited (SKS) is a non-banking finance company (NBFC) regulated by the Reserve Bank of India.

SKS' mission is to provide financial services to the poor under the premise that providing financial services to poor borrowers helps to alleviate poverty. 

The company operates across 19 of 28 Indian states. SKS was founded in 1997 by Vikram Akula, who has served as its

executive chair until November 2011.

History Started in 1997 as a public society in the form of an NGO,

Swayam Krishi Sangam (also known as SKS Society or SKS NGO) went on to transform itself into the largest MFI in India and the fastest growing MFI in the world, as of September 2009 reaching 5.3 million poor women, or some 20% of all MFI clients in India.

SKS founder Vikram Akula resigned from the board on 23 November 2011. PH Ravikumar, an independent director and former chief executive officer of NCDEX took over as the interim non-executive chairman of the only listed microfinance institution.

On 28 July 2010, SKS Microfinance debuted on the Bombay Stock Exchange.

Controversies

In 2012, an independent investigation commissioned by the company linked SKS employees to at least seven suicides of creditors in Andhra Pradesh.

A second investigation said SKS may have been involved in two other suicide cases. 

In 2012, SKS Microfinance cut 1200 jobs and closed 78 branches in Andhra Pradesh. Interviews with family members of the deceased, by BBC suggested that the reason for these suicides appeared to be large sub-prime loans taken by the villagers, with the active encouragement of SKS loan agents

Products

SKS Microfinance offers 8 financial products and services to its clients – Income Generation Loans, Mid-Term Loans, Mobile Loans, Sangam Store Loans, Housing Loans, Funeral Assistance, Gold Loan Life Insurance.The company lists some of the social benefits of its financial product and service offerings as "providing self-employed women financial assistance to support their business enterprises, such as raising livestock, running local retail shops called kirana stores, providing tailoring and other assorted trade and services."

Operations

SKS Microfinance follows the Joint Liability Group (JLG) model. The methodology involves lending to individual women, using five– member groups as the ultimate guarantor for each member. Through group lending, situations of adverse selection and moral hazard due to asymmetric information are better managed.

"Social collateral" replaces asset collateral (which is lacking in the poorer segments of society). Such a system works because India is still a highly community-centric society. The concept of honour and respect within society is deeply rooted in Indian culture and willful default invites condescending glances, humiliation and even ostracism.

Awards and Recognition SKS was ranked as the Number 1 MFI in India and number 2 in the world

by MIX Market.  Business Week has rated SKS as one of the most influential companies. SKS has received numerous awards including the CGAP Pro-Poor

Innovation Award, the ABN-Ambro/Planet Finance Process Excellence Award, Citibank Information Integrity Award, the Digital Partners SEL Award,  SHG Foundation funding and the Grameen Foundation USA Excellence

Award. SKS is the only MFI in India to receive the MIX Transparency Certification. SKS was selected by Unitus as the most promising microfinance

organization in India. SKS microfinance has become the business model for Financial

Inclusion in India.

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