Ever since I heard about the story of how Dr. Yunus started micro finance in early days, I had wondered why we cant do the same to help people around us.
In order start such a thing formally we may have to go through quite a bit of red tape but that doesnt mean we cant start such a thing informally.
So here is an offer to any rung who needs small help in starting some venture.
- Me and a few friends are ready to finance poor families for starting out economic activities.
- Loan size would be limited to Rs. 5000 in the begining.
- We are yet to work out the repayment terms and mechanisms
- After person pays out the first loan, his next loan can be increased to Rs. 10000, depending on his performance.
- Cost of collection in small micro finance activities is big portion of operations hence we are going to need society to help us in collecting the loan back or beneficiary to come and deposit the repayments himself/herself.
These are the first few thoughts on this. We need people in Dharchula and further up in villages to start spreading the word.
{!jomcomment}
Show/Hide comments
Show/Hide comment form
A HIT ON DEBUT, RISES 18%
Paves way for listing of more microfinance institutions
BS REPORTER
Mumbai, 16 August
S
KS Microfinance, the
country’s largest microfinance
institution
(MFI), made an
impressive debut on
stock exchanges today, with
the scrip gaining nearly 18 per
cent during the day. At close,
the stock was up more than 10
per cent from the issue price
of `985. SKS has a loan book
of `4,300 crore.
On the National Stock Exchange
(NSE), the stock rallied
5.58 per cent to `1,040.
It touched an intra-day high of
`1,162 (up nearly 18 per cent)
before some selling pressure
set in. It settled the day at
`1,084.10, up 10.06 per cent
over the issue price. A total of
13.78 million shares were traded
on the first day on NSE.
On the Bombay Stock Exchange
(BSE), the stock
opened at `1,036, before touching
a high of `1,159.90. More
than 6.82 million shares exchanged
hands on BSE. The
stock closed the day at
`1,088.58, valuing the company
at `7,834 crore (market capitalisation).
SKS Microfinance’s `1,654-
crore initial public offer (IPO),
which closed on August 2, was
subscribed 20.38 times in the
qualified institutional buyer
category. The portion reserved
for high net worth individuals
was subscribed 18.26 times,
while that for retail investors
was subscribed nearly three
times. The price band was
`850-985 per share.
Vaibhav Agrawal, an analyst
at Angel Broking, said,
“Sustained profitability is what
differentiates SKS Microfinance
from non-banking finance
companies and banks.
It has a good social collateral
model and an efficient distribution
network.”
With such a remarkable listing
on a day the markets were
weak, SKS Microfinance has
paved the way for listing of
more MFIs. The company has
also drawn similarities with
Mexican microfinance giant
Banco Compartamos, that got
listed in April 2007. Interestingly,
the Mexican company
was also subscribed 13 times.
Its share price surged 22 per
cent on the first day of trading,
even though the offer price was
12 times its book value. In case
of SKS Microfinance, the IPO
was priced at 6.69 times its
book value for FY10.
The original investors of
Compartamos received about
$450 million for selling 30 per
cent stake, representing a rate
of return on their original investment
(about $6 million) of
100 per cent a year compounded
over the eight-year
investment period.
With the share price of SKS
Microfinance galloping 10 per
cent at the close, sector analysts
said the stock was richly
valued and would see profitbooking
in the short term.
“However, over the next
three-four years, the company
may come up with another
capital-raising plan,” added
Agrawal.
The IPO comprised fresh
issue of 7.45 million equity
shares and an offer for sale of
9.35 million equity shares by
the company’s shareholders.
After the issue, public shareholding
in the company is
pegged at 21.6 per cent, while
Sequoia Capital’s stake has
come down to 15.1 per cent
from 22.3 per cent.
As of March 31, net nonperforming
assets were `4.80
crore (0.16 per cent of the
loans). The loan book of the
company grew at a compounded
annual growth rate
of 122 per cent to `2,975 crore
during FY07-10