SKS microfinance forays into Punjab

SKS microfinance forays into Punjab

CHANDIGARH: SKS Microfinance Ltd., Indias largest microfinance and the fastest growing microfinance institution in the world, has expanded its network into Punjab.

SKS Microfinance extends collateral-free loans to women which they use to start income-generating activities. With operations spread across 19 states, SKS reaches out to 53 lakh poor households across 62,000 villages. It has disbursed collateral-free microloans worth Rs 9840 crore for income generation, through1,676 branches .

Punjab has approximately 22 lakh people living Below Poverty Line, with a credit demand of Rs 1,168 crore. In line with our vision to provide collateral-free loans at the doorstep of the poor, SKS has started operations in Malout, Mansa, Chandigarh, Bhatinda, Sangrur and Patiala, said M R Rao, COO, SKS Microfinance.

SKS Microfinance, a Non-Banking Finance Company regulated by Reserve Bank of India, uses a lending model that was developed by Nobel Prize winner, Muhummad Yunus of the Grameen Bank in Bangladesh. The system involves forming groups of five women who serve as guarantors for each other, thus enabling SKS to provide loans without taking any collateral from borrowers. SKS provides 50-week loans for income generation. In the first year, a member can borrow up to Rs.16,000/- and get a further incremental loan of Rs.4000/- every year.

The loans have an insurance cover for the duration of the loan. The loans are repaid every week at the center meeting held near the members residence. The loans attract an interest rate of 15 per cent flat. A one-time membership fee of Rs.50 is charged along with a 1 % loan processing fee.

SKS also offers Swayam Shakti Suraksha a micro-insurance product jointly with Bajaj Allianz where the member pays Rs 20/- per week and at the end of 5 years gets Rs 5000/-. In case of accidental death, the nominee of the member gets Rs 10,000/-.Millions of women across India have used these microloans to set up small businesses like Kirana stores, sewing units, vegetable vending, tea stalls, handicrafts etc.

In a significant step towards affirmative action, SKS recruits field staff from the same social background that it serves. SKS employee base is 17,520 of which with 25 per cent belong to OBCs, 19 per cent to Scheduled Castes, 3 per cent to Schedule Tribe and 14 per cent to Backward Castes.

Over 90% of SKS staff is the field staff, who are tenth standard pass outs. They are trained for two months and are also taught computer skills. At SKS Microfinance, growth opportunity is very good. On completion of training, the FA is allocated centers where he starts operating. Promotions and growth opportunities being good, he moves into a desk job at the branch office in approximately one year. He is then exposed to other roles at the branch like accounting, administration etc. Once he has gained enough exposure to all roles, the Field Assistant gets to head a branch and thereafter to head a Unit.

http://punjabnewsline.com/content/view/20225/70