SKS looks to raise Rs 3,000 cr next fiscal

Hyderabad: City-based SKS Microfinance is gearing up to raise Rs 3,000 crore during the next fiscal to meet its lending requirements.A S Dilli Raj, chief financial officer of the India's only listed micro lender, said: "Basically in terms of FY'14, we are talking about Rs 3,000 crore incremental debt raising and a disbursement of Rs 5,000 crore which will result in a portfolio outstanding of Rs 3,000 crore by the year-end". One third of Rs 3,000 crore will be through securitisation and the remaining will be term loan and other instruments, he added.A SKS, which had to make Rs 1,350 crore as provisioning towards bad loans of Andhra Pradesh for the past few quarters, reported profit of Rs 1.2 crore for Q3FY13, compared to loss of Rs 428 crore for Q3FY12. The company has earned a profit after seven consecutive quarters of losses on account of provisioning and rise in advances. During the October-December quarter, total income of the company rose to Rs 85 crore from Rs 83.82 crore in the same period a year ago. For the nine months ended December 2012, SKS incurred a net loss of Rs 299.84 crore compared to Rs 1,031 crore in the same period of the previous fiscal. The micro lender had raised Rs 981 crore through securitisation in the current fiscal and another Rs 1,500 crore through various modes. On the recent rate reduction by the Reserve Bank, Dilli Raj said the rate cut would show impact on the borrowing rates from April. "62 per cent of our borrowings are floating rate contracts. As and when the anchor and PLR rates are reduced that would reduce our cost of borrowings," he said. The average cost of borrowing for SKS in Q3 of the current fiscal stood at 13.2 per cent and it was reduced by one per cent in the current quarter, he said. SKS currently charges 24.55 per cent from its borrowers besides one per cent processing fee. He, however, said their operational cost is very high due to small ticket size and delivery cost. The company started giving gold loans on pilot basis in 50 branches and awaiting the results. "We will run it as a pilot for next another six months and see the results and take a decision whether to amplify it or not," Dilli Raj said. According to him, SKS gets 90 per cent of its income from micro lending.