India: SKS Microfinance raises Rs 147 cr ($37.3 million) via equity sale
Mumbai, India, February, 01 2008 -
Vikram Akula-promoted SKS Microfinance has recently raised Rs 147 crore ($37.3 million) through a third round of equity infusion.
The investors include two new US-based strategic players, Silicon Valley Bank and Columbia Pacific, apart from the existing players like Sequoia Capital, Vinod Khosla and Odyssey Capital.
Silicon Valley Bank is a financial services company which is focused on entrepreneurial technology and life sciences companies for the past 25 years.
Columbia Pacific is a company involved in the healthcare space. The transaction was completed in December 2007 and the funds will be used to financing the microfinance institution’s expansion plans in 2008, said SKS Microfinance chief operating officer MR Rao.
In 2007, the MFI had also transferred assets worth Rs 140 crore to Centurion Bank of Punjab and HDFC Bank. Earlier, SKS had sold assets through a similar route to Citi. This helps these banks meet their targets under the priority sector lending bracket.
In October 2007, Hyderabad-based SKS Microfinance on Thursday announced an equity infusion of Rs 50 crore by private venture capital fund Sequoia Capital, along with other investors like Unitus Equity Fund, Vinod Khosla, Ravi Reddy and Odyssey Capital.
Mr Rao explained that after the microfinance sector was hit by a cash flow crisis in January 2007, there has been a constant need to avoid dependence on any single bank or financial institution for funds. In 2007, the MFI had received funds worth Rs 1,200 crore from a host of banks, including Citi, ABN Amro Bank, Barclays, HDFC Bank, Centurion Bank of Punjab and Corporation Bank.
SKS now has 15 lakh customers. Of which, 7.5 lakh customers hail from southern states like Andhra Pradesh and Karnataka. In 2008, the MFI is exploring the option of having presence in Haryana and Punjab. Mr Rao said that models of mobile banking in Africa and G-Cash in the Philippines could be replicated in the Indian market.