Probe nails MFIs, but biggies still in denial
A government investigation into the spate of suicides reported in recent weeks — allegedly due to loan recovery harassment — has established that most of the victims were borrowers from big and registered microfinance institutions (MFIs) and that they had indeed been subjected to coercive and unethical tactics by MFIs loan sharks.
A special cell of the Society for Elimination of Rural Poverty, aided by district task forces, has tabulated 42 suicides and attempted suicides that had occurred in the past three to four weeks across the state.
“A majority of the victims had borrowed from the so-called registered NBFCs including SKS Microfinance, Share Microfin and Spandana Spoorthy. The investigations are in various stages and, if proved, we will initiate criminal action against the MFIs”.
Read the rest on Indian Express
SKS: The Governance Debate !
Anil Singhvi, Corporate Advisor on the termination of CEO Suresh Gurumani’s services by SKS Microfinance.
I completely disagree with what Vikram has said publicly on this that this is because post IPO the whole microfinance business is looking very competitive. I don’t think in a month’s time, the business can look dramatically different than what it looked until July. And coming from a person as seasoned and experienced, he himself has said that he is an experienced person— I find it very, very unbelievable and funny, not to be rude to him.
The Board did not meet after 1 year, board met after a month. In one month’s time, in India I don’t think we are having growth so rapidly that entire economic scenario has changed in a month’s time. And the same CEO becomes redundant for you who was carrying all this growth? I think it’s a laughingstock… we all are on boards, we all have run companies. Who is he trying to fool around? Let’s not! He thinks we all are nuts here in India.
Read the rest on Moneycontrol
A muddle in microfinance
Every sunrise sector needs a company that stands for all that is good about the business.Usually, this company is one that is listed on the stock exchanges and which has a widespread share ownership. The Indian software services industry, for instance, had Infosys Technologies as its bellwether (Tata Consultancy Services was older, but didn’t sell shares to the public till the 2000s; and Wipro, in the early 1990s, was largely a hardware firm). Investors, other stakeholders and the public form a view on the sector based on what is happening at and with the bellwether.
The Indian software industry, in hindsight, was (and is) fortunate to have Infosys as its representative. Recent events would suggest that the nascent microfinance business in the country is unfortunate to have SKS as its. Read the rest on Mint
Credit score saw Gurumani’s exit
The exit of ousted SKS Microfinance managing director, Mr Suresh Gurumani, appears to be a classic example of professional differences going out of hand and turning to an ego clash.
According to a highly placed source in the board of Hyderabad-based microfinance company, the difference of opinion between Mr Gurumani and the board arose on the introduction of credit scoring for the borrowers of the firm. Read the rest on Deccan Chronicle
SKS Microfinance to seek legal view on AP govt ordinance
SKS Microfinance today said it will seek legal opinion on whether the Andhra Pradesh government’s new ordinance to regulate the microfinance sector will be applicable to the company. The ordinance is aimed at regulating Microfinance Institutions (MFIs), which have come under criticism for charging exorbitant interest rates from the poor and for their strong arm tactics for recovering money. Read the rest on Hindustan Times