About Rs1,250-crore portfolio of SKS has been in Andhra Pradesh and this is estimated to be about 25% of the company’s total portfolio. With the Andhra Pradesh government enacting an Act to regulate the microfinance sector, the company’s portfolio had become sticky in the state. This has become a major drag on the company’s operations.
“The Bill is a welcome move. All that we had lent in AP is more or less in the form of working capital. Unless we lend more, we will not be able to recover the funds that were already lent,” Dilli Raj, SKS’s chief financial officer, toldDNA.
According to him, the company was not able to recover the loans in AP since it was not disbursing fresh loans. “According to the state government regulations, we need to take prior approvals for every loan application before disbursing the loan. We had filed about 75,000 applications with the authorities in AP alone for approvals.
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