Presented by : SMITA RASTOGI

ABOUT SKS

Swayam Krishi Sangam (the full form of SKS)

SKS founded in 1997 as NGO in the state of Andhra Pradesh

SKS founded by Vikram Akula

2005, SKS Microfinance Private Limited registered as a NBFC with the RBI

2013, SKS Microfinance Limited became NBFC-MFI

SKS operates across 19 of 28 Indian states

SKS only listed MFI in stock exchange in India

MISSION:

To provide financial services to the economically weaker sections

VISION:

To serve 50 million households across India and other parts of the world and also to create a commercial microfinance model that delivers high value to our customers.

CORE VALUES:

• RIGHT FOCUS- CUSTOMER FIRST

• RIGHT MEANS- ETHICS ALWAYS

• RIGHT WAY- CONSISTENT QUALITY

ABOUT SKS

SKS ANTHEM SONG:

SKS has its own anthem titled “Udhte Jaayen, Badhte Jaayen” (meaning “flying on, marching ahead” in

Hindi) aimed at motivating staff across SKS. Composed by Euphoria, a popular Indian band, the SKS

anthem is energetic and positive in tone.

SKS LOGO:

SKS WORKING METHODOLOGY

SKS serves millions of poor women across villages and urban slums in India.

SKS Microfinance follows the Joint Liability Group Model

WORKING PROCESS:

• Village selection

• Projection meeting

• Group formation

• Compulsory group training (CGT)

• Centre meeting

• Borrower education program

• Also a part of MFIN and Sa-Dhan, follow the code of conduct and regulations

Effective Interest rate 19.75% and processing fees 1%

Principal and interest payments due on a weekly basis

PROPRIETARYPRODUCTS PRODUCT LOAN RANGE LOAN

TERM

Income Generation

Loans (IGL) - Aarambh

Rs. 9,100 to Rs. 20,010; maximum of Rs. 29,565 50 weeks

Mid-Term Loan (MTL)

- Vriddhi

Rs. 9,100 to Rs. 15,010; maximum of Rs. 15,010

After the completion of 19th weeks & till 46th weeks of an IGL cycle and

till 96th week of LTL cycle.

50 weeks

Long Term Loan (LTL) Rs. 30,915 to Rs. 38,635; maximum of Rs. 49,785

Completed 2 IGL Cycles

2 Years 104

weeks

Swarna - Pushpam Gold

Loan

Loans range from Rs. 2,000/- to Rs. 2,00,000/-

365 days

Biomass Cook stove

Solar Light

Water Purifier

Mobile Phone

Bicycle

Sewing Machine

Loan amount ranges from Rs. 1,799 to Rs. 5,290.

25 weeks

DISTRIBUTORY PRODUCTS

Product Features Benefits

Life Insurance Weekly payment of Rs. 20

for 5 years

Upon death, we disburse to the beneficiary the full sum

assured of Rs. 5,000 + account value, which is equal to

the aggregate of the premiums paid + interest accrued,

if any, less any charges for the administration of the

policy

In the event the death is deemed an accidental death,

the beneficiary receives Rs. 10,000 + account value

Upon maturity in 5 years where no death has occurred,

we disburse to the policyholder the account value.

SERVICES 3 Service Quality Checks:

• Sangam leader’s meeting

• Group leader feedback

• Toll free number

SKS technology & web based service provider

Investors alerts

Schedule a meeting app

General FAQS

Investor FAQS

Post a query

Site feedback

Contact officials

SKS NEW INITATIVE

PROGRAM

SOLAR LAMP FINANCING

PROGRAM

MOBILE FINANCING PROGRAM

GOLD LOAN

SKS 3’C SCALEABLE FORMULA

CAPITAL

COST

CAPACITY

SKS MARKETING STRATEGY

RURAL ADVERTISING

PASSBOOK ADVERTISING

SAMPLING EXERCISE

SKS FINANICAL INCLUSION

Established its operations across 341

districts in 19 States out of which 315

have been identified by NREGA as the

poorest.

Reach out to millions of poor – including

Backward-Scheduled Castes.

Approximately 57.3% of our members

belong to the “weaker section” of Indian society.

Amongst our employee base, many of

them belong to Backward Castes and

Scheduled Castes. Many of our

employees are children of our members.

SKS PARTNERS FINANCIAL

INSTITUTIONS

INVESTORS ASSOCIATION SUPPORTERS

PUBLIC SECTOR

BANKS

SIDBI MFIN BILL AND MELINDA GATES FOUNDATION

PRIVATE SECTOR

BANKS

KIMET CAPITAL SA-DHAN CGAP

CREDIT RATING

AGENCIES

YATISH TRADING MICROFINANCE

NETWORK

CRYSTAL SPRINGS FOUNDATION

INSURANCE

COMPANIES

SILLICON VALLEY

B ANK

ASIA-MICROFINANCE

INSURANCE NETWORK

DIGITAL PARTNERS

BAJAJ ALLIANCE FORD FOUNDATION

SANDSTONE GRAMEEN FOUNDATION

HINDU TEMPLE SOCIETY OF CAPITAL

DISTRICT

SWISS DEVELOPMENT AGENCY

MIT POVERTY ACTION LAB

RAVI & PRATIBHA REDDY FOUNDATION

ECHOING GREEN FOUNDATION

THE I2 FOUNDATION

INDIA DEVELOPMENT SERVICE

MAHARASHTRA FOUNDATION

SKS MEDIA COVERAGE (2015)

• SKS share all the vital information’s with their stakeholders, management, clients, general public with the help of

media regularly, in order to keep transparency and make them update with the company operational and financial

performance.

SKS Microfinance Limited slashes interest rate to 19.75%, becomes the first MFI to charge sub-20% interest rate

on 27-11-15

SKS Microfinance Limited transforms operations with IBM Mobile First solution on 25-11-15

MUDRA sanctions Rs. 100 crore refinance line at 10% per annum to SKS Microfinance Limited on 28-10-15

SKS Microfinance Limited gross loan portfolio registers 14% QoQ growth to Rs. 5,462 crore in Q2-FY16 on 19-

10-15

SKS Microfinance Limited’s Board of Directors approves Company’s proposal to apply for a Small Finance Bank

on 29-01-15

SKS CODE OF CONDUCT

Code of Conduct for Directors and Senior Managers

Internal Guidelines on Corporate Governance

Code of conduct/ Ethics- for all Employees

• Dealing with Our Fellow Employees

• Dealing with Our Sangam Members

• Dealing with Our Business Partners and Lenders

• Dealing with the Marketplace

• Dealing with Our Communities and Governments

Whistle Blower Policy

Policy on Work Place Harassment

Policy on Conflict of Interest for Management and Employees

Code of practice and procedure for fair disclosure of unpublished price sensitive information.

Policy of appointment of Independent Director.

Policy on Corporate Social responsibility work

Policy on Related Party Transaction

CHARTER OF COMMITTEES

ASSET LIABILITY MANAGEMENT

COMMITTEE

AUDIT COMMITTEE

NOMINATION and REMUNERATION

COMMITTTEE

RISK MANAGEMENT COMMITTEE

STAKEHOLDER’S RELATIONSHIP

COMMITTEE

SKS FINANCIAL PERFORMANCE (crore) Operational

Information

FY14 FY13 FY12 FY11 FY10 FY09

Total no. of Branches 1,255 1,261 1,461 2,379 2,029 1,353

Total no. of Districts 294 298 329 378 341 307

Total no. of Staff 8,932 10,809 16,194 22,733 21,154 12,814

Total No. of Members 5,783 5,021 5,351 7,307 6,780 3,953

Amount Disbursed 4,788 3,320 2,737 7,831 7,618 4,485

Portfolio outstanding 3,113 2,359 1,669 4,111 4,321 2,456

Revenue 545 353 472 1,270 958 554

PAT 70 (297) (1,361) 112 174 80

Assets 2,497 2,511 1,722 4,300 4,055 3,039

Networth 459 390 435 1,781 950 665

SKS FINANCIAL PERFORMANCE (crore) Particulars FY15 FY14 FY13 FY12 FY11 FY10 FY09

No. of

Members

5,325 4,963 4,308 4,257 6,242 5,795 3,521

No. of loans

disbursed

4,171 2,837 2,016 1,320 4,111 4,321 2,456

Disbursements

period

2,911 1,528 1,233 503 3,479 2,937 1,417

Gross loan

portfolio

918 1,075 783 817 632 1,384 1,039

Disbursements /

No. of Loans

Disbursed

8,994 6,275 3,445 1,623 2,681 3,638 3,093

Gross loan

portfolio / No.

of active

borrowers

3,214 2,864 2,246 1,984 0 0 0

Gross loan

portfolio / No.

of loan officers

787 721 444 312 0 0 0

FINANCIAL RATIO Particulars FY15 FY14 FY13 FY12 FY11 FY10 FY09

Spread analysis ( as of Average Gross Loan Portfolio)

Gross yield

(I)

23.90 21.20 19.20 17.30 27.00 28.30 31.60

Portfolio

yield

18.80 17.50 15.20 14.40 24.50 25.30 28.40

Financial cost 8.30 8.30 7.80 7.30 7.40 8.50 11.10

Operating

cost

9.50 9.60 14.30 15.40 10.90 10.40 12.70

Provision and

write-offs

0.30 0.60 13.30 42.90 5.00 1.50 0.80

Taxes 0.20 0.00 0.00 1.30 1.30 2.80 2.50

Total

expenses (II)

18.30 18.50 35.50 67.00 24.70 23.20 27.10

Return on

average gross

loan portfolio

(I) - (II)

5.60 2.70 -16.20 -49.80 2.40 5.10 4.50

FINANCIAL RATIO Particulars FY15 FY14 FY13 FY12 FY11 FY10 FY09

Efficiency

Cost to

income

61.0 74.5 125.10 155.30 55.70 52.40 61.80

Asset quality

Collection

Efficiency

99.80 99.80 99.10 95.60 0 0 0

Gross NPA 2.40 1.90 5.60 28.00 0 0 0

Net NPA 1.30 1.60 5.00 14.00 0 0 0

Leverage

Debt :

Equity

3.1 3.3 4.1 2.3 1.3 2.8 3.2

Capital

adequacy

ratio

31.70 27.20 32.20 35.40 45.40 28.30 39.00

Profitability

ROA 5.30 2.90 -15.80 -46.70 2.30 4.90 3.90

ROE 21.60 16.70 -74.40 118.90 7.50 21.50 18.20

BEST PRACTICES OF SKS

Only India's listed microfinance lender in stock exchange

Charges 19.75% of annual effective interest rate.(excluding processing fee), which is less than market 21%

Cost of fund is lower because loan rose at lower ROI from Venture Capitalist ,Stock Market and Private Equity

SKS made an IPO in 2010

Keep check on services of employees involved in the fraud which have been terminated and the company is in the

process of taking legal action, according to the company's latest annual report.

Company is hopeful that the profitability on ROA will be achieved at 3% by expanding business in other states in

India excluding Andhra Pradesh and by the expansion of non- micro-finance business like gold loan. Company is

doing geographical as well as product diversification.

Now only large MFI company which will not be a bank.

If MF Bill will pass, will recover Rs 800 crore in Andhra Pradesh.

SKS credit plus services

7 REASONS WHY SKS MF STOCK WILL CONTINUE TO

UNDER PERFORM Malegam Committee Report on MFIs has imposed cap on interest rate, margins, total indebtedness and

tenure of loans.

The ultimate goal of microfinance is to enable the poor to build assets, increase incomes, reduce vulnerability

to shocks and economic stress and improve quality of life by enabling better access to education and

healthcare, at affordable cost. Value for share holders can be created by earning more profits, paying higher

dividends, professionally managing the company, among others. There is a clash of interest. You cannot

enrich the share holders at the cost of the poorest of the poor.

Corporate governance issues: Loan to promoters at 0%, poor borrowers @ 19.75 % p.a.

Look at the insider trading data.

A microfinance bank may short circuit SKS growth story.

Narayana Murthy of Infosys is the chairman of business ethics and corporate governance in SKS

Microfinance.

Venture Capitalists have suffered huge losses, waiting to exit in the near future by booking their losses.

SKS MF CONTROVERSY

In 2012, cut 15000 jobs and closed 78 branches in Andhra Pradesh.

Auditors of SKS informed during year there were instances of cash embezzlements Rs 1,27,62,403; loans given to

non-existent borrowers on basis of fictitious documentation created by employees Rs 83,32,870 and misappropriation

of cash by external party to Rs 4,55,000.

Many blamed MFIs – which give small loans to them at higher interest rate, put them further to more poverty with

indebtedness then persistent pressure and coercion for repayment so relentlessly that many took their own lives.

SKS facing recovery problems in Gujarat and West Bengal after the crisis of Andhra Pradesh in last October, 2011.

SKS has come under IRDA's scanner for violating norms in selling insurance policies to its borrowers for charging

higher commission on sale of insurance policies.

Fails to Get Small Bank License, Stock Sinks 20%

SOCIAL IMPACT CREATED ON WOMEN

Women after joining MFI became more mature in decision making, material knowledge about working

of MFI and loan settlement procedure, sharing information to others comfortably, ideas and access to

money and potential which are unutilized.

Awareness about political & legal among the societies. Recently gave the vote in Gram Panchayat

election.

Socio-economic status up gradation.

Autonomy for life choices regarding the issue on family planning.

Women position in life/society improves as they are financially independent.

Positive approach to child development, providing the best education and basics amenities.

To provide more credit facilities to expand their business or investing money in husband or son’s

business.

Awareness about the importance of saving, investing and insurance.

GLIMPSE OF

FIELD VISIT