SKS Microfinance swings to profit in Q3
New Delhi: SKS Microfinance, country's only listed MFI, Thursday reported a net profit of Rs 1.2 crore for the third quarter ended December 2012 on the back of success in its multi-pronged turnaround strategy.
In the October-December quarter of 2012-13, SKS had posted a loss of Rs 428 crore.
The company has earned profit after seven consecutive quarters of losses on account of rise in advances.
During the October-December quarter, total income of the company fell to Rs 85 crore from Rs 83.82 crore in the same period a year ago, the company said in a statement.
SKS's provisions against bad loans during the quarter declined to 28.36 lakh against Rs 358.66 crore in the same period a year ago.
As for Andhra Pradesh, the portfolio in the southern state has been reduced to a nil in second quarter from a high of Rs 1,491 crore at the start of Andhra Pradesh microfinance crisis in October 2010.
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.
The Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act, 2010, requires MFIs to declare interest rates upfront and disclose all details relating their borrowers.
The growth momentum has been accelerated on account of the increasing supply-side support, it said.
"Drawdowns have registered a 40 percent growth from Rs 405 crore in the second quarter to Rs 566 crore in the third quarter as the dedicated organisation-wide efforts in implementing a seven-pronged turnaround strategy began registering never-before gains," it said.
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.