SKS Microfinance, Citibank in partnership programme for rural poor

SKS Microfinance, Citibank in partnership programme for rural poor
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First Published: Wed, May 09 2007. 04 28 PM IST
Updated: Wed, May 09 2007. 04 28 PM IST
PTI
Hyderabad: SKS Microfinance Private Ltd and Citibank today announced a partnership programme under which rural poor would be given loans to the tune of Rs180 crore during the current financial year.
Under the programme, income-generating loans, ranging between Rs5,000 and Rs20,000, would be provided to 2.50 lakh people spread across 7,000 villages in 11 states.
The initiative was announced jointly by SKS Microfinance Founder and CEO Vikram Akula and Citibank Global Director (Microfinance) Robert Annibale here.
“The partnership will enable us to provide increased economic opportunities to hundreds of thousands of poor families who are yet to receive any institutional credit. Our goal is to touch 5 million families by 2010,” said Akula, a pioneer in microfinancing who was named by Time magazine as one of the world’s 100 most influential people.
The Citibank-SKS initiative would cover 49 branches of SKS Microfinance in Andhra Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Jharkhand, Uttar Pradesh, Bihar, Rajasthan, Chhattisgarh and West Bengal.
“The highlight of the programme is that each individual loan originated by SKS is purchased by Citibank which shares credit risk in the transaction,” Akula said.
The loans would be given to self-help rural groups, each comprising five members, who provide a social collateral and are responsible for repayment if any of the members was unable to pay an instalment.
SKS, which currently has 6.50 lakh clients spread over 7,300 villages in 11 states, had so far disbursed Rs772 crore loans.
The partnership combines the robust customer base and management model of SKS Microfinance with Citibank’s experience in financial structuring for microfinance institutions, networks and investors in emerging markets, Annibale said.
“We hope to replicate this unique model in other countries as well,” he said.
Grameen Foundation (GF), a global non-profit organisation, as part of its $50 million (Rs204 crore) Growth Guarantee programme, would provide a limited guarantee to SKS and would be an integral element of the risk-sharing structure.
“SKS has demonstrated that providing financial services to rural communities and micro-entrepreneurs in India can be achieved on a sustainable and scalable basis,” Annibale said.
Speaking on the occasion, Citibank India Business Manager (Microfinance) Alok Prasad said the partnership programme was aimed at providing financial products and services to marginalised sections who are yet to be covered by banks.
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First Published: Wed, May 09 2007. 04 28 PM IST
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