To resume operations in Andhra, may recover Rs 300cr: SKS

Moneycontrol Bureau

SKS Microfinance is hopeful of recovering at least Rs 300 crore out of the Rs 1300 crore of loans it had written off in its Andhra Pradesh portfolio, Chief Financial Officer Dilli Raj said in an interview to CNBC-TV18 today. The recovery could be spread over the next two years, Dilli Raj said.

SKS Microfinance is looking to resume operations in Andhra Pradesh, following a Supreme Court interim order earlier this week allowing it to lend to customers in the state. The state government, however is set to challenge the SC order.

SKS had stopped operations in Andhra around two years back after the state government tightened regulations against micro finance firms in the wake of a spate of suicides.

The company is readying a plan for restarting its Andhra Pradesh operations, and will finalise it within a week. The company has 120 branches and 1200 staff in the state. Dilli Raj said two lakh out of its 18 lakh customers in the state have repayed loans in the last two years even though the company had suspended operations. He said the company would give priority to these customers once it resumes business in the state.

He is confident that the company will get a good response from borrowers in the state when it returns.

"We have not been replaced at the ground level; in fact the poor borrowers have been driven back to the money lenders after micro finance firms suspended operations. So there is a strong economic rational for them to come back to us," Dilli Raj said.

Since SKS had already written off the entire Andhra Pradesh portfolio, every rupee of recovery would flow into the bottomline, Dilli Raj said.