Vinod Khosla, along with other social venture capitalists, the Small Industries Development Bank of India (SIDBI) and SKS’ borrower community, made a Rs. 11 crores ($2.5 million) investment in SKS Microfinance today. The deal is the largest-ever investment in any microfinance institution in India. SKS, whose mission is to provide financial services to the poor, will use the investment to access commercial debt and scale outreach from its current base of 200,000 clients to 700,000 clients in 2006-07.
“I am impressed with the people and processes at SKS and am confident that this investment will enable them to serve even more poor families throughout the country,” said Khosla.
Of the Rs. 11 crores ($2.5 million) investment, Khosla has contributed Rs. 2.1 crores ($470,000) while technology entrepreneurs Ravi Reddy and Sandeep Tungare, co-founders of Vistaar Technologies, have contributed a combined Rs. 2.1 crores ($470,000). The Unitus Equity Fund (UEF) also invested Rs 2.1 crores ($470,000). The UEF is managed by a subsidiary of Unitus, a Redmond, Washington-based global microfinance accelerator. In addition, SKS borrowers have increased their current investment from Rs 2 crores ($450,000) to Rs 6.5 crores ($1.5 million) and the SIDBI has expanded its current investment from Rs. 50 lakhs ($112,000) to Rs. 1 crore ($225,000).
“SKS is on the cutting edge of microfinance, deploying state-of-the-art technologies to reduce operational and transaction costs. This approach will enable SKS to serve its clients more effectively and achieve its ambitious goals,” remarked Reddy, a supporter of SKS since its inception in 1998.
“SKS is an industry leader in financial transparency, innovation and rapid growth–they are exactly the type of partner we want to build strong relationships with,” said Geoff Davis, President and CEO of Unitus.
SKS CEO, Vikram Akula, noted, “We are delighted to have these world-class investors join SKS. They bring deep knowledge of how to scale companies and SKS will benefit tremendously from the skills and experience they have.”
About SKS Microfinance:
Founded in 1998, SKS serves close to 200,000 clients in over 3,000 villages spread across five states: Andhra Pradesh, Maharashtra, Karnataka, Madhya Pradesh and Orissa. It has a portfolio of $18 million, with a PAR over 30 days of only 2 percent and has consistently achieved a 250 percent annual growth rate, one of the fastest of any microfinance institution in the world. For more information about SKS Microfinance, please visit: www.sksindia.com
About Vinod Khosla:
Vinod Khosla is the founding CEO of Sun Microsystems and a partner at Kleiner Perkins. Vinod and several partners founded Khosla Ventures in 2004 and have pledged a portion of their investment proceeds to making a positive social impact. For more information about Khosla Ventures, please visit: www.khoslaventures.com
About Ravi Reddy and Sandeep Tungare:
Ravi Reddy and Sandeep Tungare are co-founders of Vistaar Technologies and co-founded Think Systems, a highly successful demand-planning software company, which they sold in 1997.
About Unitus:
Unitus is a global microfinance accelerator that acts as a social venture capital investor for the microfinance industry. As of March 2006, Unitus had eight MFI partners worldwide serving more than 540,000 poor clients. Based in Redmond, Wash., USA, and with an office in Bangalore, India, Unitus relies on innovative financial instruments and the financial resources of like-minded individuals and foundations to fulfill its mission. For more information about Unitus and the Unitus Equity Fund, please visit: www.unitus.com
Media Contact:
Chris Turillo
Manager, Communications
SKS Microfinance
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