SKS Microfinance to raise Rs 900 cr via share sale

MUMBAI: Country's largest MFI SKS Microfinance today said it will raise up to Rs 900 crore through issue of shares to institutional investors.

The board of the country's only listed micro finance company has approved issuing equity shares through qualified institutional placement (QIP) to raise up to Rs 900 crore, SKS said in a filing to the BSE today.

The board also approved raising the authorised capital of the company to Rs 135 crore from Rs 95 crore.

SKS had raised Rs 1,654 crore by way of an initial public offering (IPO) in July last year.

The micro finance (MFI) industry is going through rough weather after the Andra 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 microfinance 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.

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.

SKS Microfinance Chairman Vikram Akula said in the annual report that the provisions in the Andhra Pradesh MFI Act were hampering the company's growth in the state, resulting in a five per cent reduction in its overall loan portfolio.

Source: EconomicTimes