SKS Microfinance reports Rs 384 cr loss in Q2
Country's only listed microfinance institution SKS Microfinance today reported a net loss of Rs 384 crore for the second quarter ended on September 30, 2011, on account of lower income and higher provisioning.business Updated: Nov 07, 2011 20:06 IST
Country's only listed microfinance institution (MFI) SKS Microfinance on Monday reported a net loss of Rs 384 crore for the second quarter ended on September 30, 2011, on account of lower income and higher provisioning.
SKS Microfinance had a profit of Rs 80.55 crore in the July-September quarter of the previous fiscal, the company said in a statement.
Total income of the company also declined one-third to Rs 122.99 crore during the quarter, from Rs 366.56 crore in the same period a year ago, it said.
During the quarter, SKS's provisions against bad loans rose to Rs 353 crore, a twenty-fold jump from Rs 17 crore in the year-ago period.
For the six months ended on September 30, SKS incurred a net loss of Rs 603 crore. It had a profit of Rs 147 crore in the same period last fiscal.
The board of SKS had last week approved raising of up to Rs 900 crore through issue of shares to institutional investors. The company had raised Rs 1,654 crore by way of an initial public offering (IPO) in July last year.
Micro finance -- the practice of giving small loans to poor people -- have come under intense scrutiny after a string of farmer suicides in the Andhra Pradesh, leading to the creation of an Act to regulate their activities.
The micro finance industry is going through a rough weather after the Andhra Pradesh government introduced an Act last year to regulate their activities.
The Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act, 2010, requires MFIs to declare interest rates upfront and disclose all details relating to their borrowers.
The Act has hampered micro finance activity in the state and MFIs that were accused of charging very high interest rates on the loans are now finding it hard to get funds from banks.