MUMBAI – India’s only listed microlender, SKS Microfinance, on Friday said its losses in the fiscal first quarter narrowed sharply on the back of a drop in bad debt provisions and loan write-offs.
SKS posted a net loss of 388.4 million rupees ($7.06 million) for the three months to June, from a loss of 2.18 billion rupees for the same period a year earlier. It was the sixth consecutive quarterly loss for the firm.
Debt provisions and write-offs fell to 96 million rupees from more than one billion rupees, the Hyderabad-based firm said, adding that total income in the quarter fell nearly 61 percent to 590 million rupees.
SKS has been under a cloud since 2010 after the state of Andhra Pradesh — the hub of the microfinance industry — accused microlenders of exploiting poor borrowers with exorbitant lending rates and abusive debt collection practices.
Microlenders offer loans as low as $20 to small business people and farmers.
SKS, which has 5.07 million clients in 18 states, has seen its business in Andhra Pradesh erode sharply since the state government decided to crack down on the activities of microlenders to curb the alleged wrongdoings.
SKS on Friday said it has sharply reduced its lending activities in Andhra Pradesh and shifted its focus to states such as West Bengal, Karnataka, Madhya Pradesh, Bihar and Orissa to boost revenue.
Last year, the firm’s founder-chairman Vikram Akula, who set up the lender in 1997, quit amid reported differences about how to revive the company’s fortunes.
The passage of new federal legislation is now awaited that will make India’s central bank the sole regulator for the microfinance sector.
The move will override all state laws — establishing a level playing field — and tighten supervision of the industry.