6

Sa-Dhan Patrika

Volume 6

Issue 1

A success story called SKS

R

and managed by SKS. The organisation

egistered under the Societies

uses a peer-lending model, integrating

Registration Act in 1997, Swayam

industry best practices with its own

Krishi Sangam (SKS) was founded by

innovations. Members form groups of five

Vikram Akula in the Telengana district of

to be officially recognised and qualify to

Medak in Andhra Pradesh. The area forms

then apply for a loan. These groups

part of the drought-prone, semi-arid

collectively guarantee each others'

Deccan Plateau, where almost half the

loans.

population lives in poverty and the

region suffers from high rates of hunger

In the first year, members may secure a

and malnutrition. Beginning with a credit

SKS provides basic

maximum of Rs 10,000 in income-

and savings programme launched in

financial services

generating loans. Loan eligibility increases

June 1998 in Narayankhed, SKS'

with the belief that

by an additional Rs 3,000 every

operations have since then expanded

the poor have a

to 28 branches in the districts of Medak,

subsequent year, provided neither the

strong

member nor the group has defaulted on

Nalgonda, Nizamabad, Warangal and

understanding of

any payments. Continuous credit is

Khammam.

which businesses

available only to those SKS members

to start and how

who demonstrate a perfect repayment

The organisation was initially supported

best to employ

and credit history as well as credit

by individuals and various institutions

working capital

discipline.

such as the Ravi & Pratibha Reddy

Foundation, Echoing Green Foundation,

SKS currently serves over 90,000 women

the  i2 Foundation, the Maharashtra

and has cumulatively disbursed around

Foundation, the Sarode Foundation and

Rs 100 crore. Aggregate growth at SKS

the India Development Service.

over the last few years has been a result

Currently all operations are supported by

of both scaling up by improving the

commercial loans from various financial

productivity and market penetration

institutions including SIDBI (Small Industries

and scaling out by geographic

Development Bank of India), FWWB

expansion.

(Friends of World's Women Banking), ICICI

Bank, HDFC Bank, UTI Bank, and ABN-

Scaling up at SKS can be primarily

AMRO Bank. SKS has recently received

attributed to (i) efficient recruitment and

its license to operate as a Non-Banking

high staff retention in the central office

Finance Company (NBFC) and has

and the field; (ii) securing access to debt

received numerous awards including the

and equity to fund growth; and (iii)

CGAP awards for pro-poor innovation,

adopting a systems approach to

f i n a n c i a l  transparency,  process

excellence and others.

managing the organisation that

involved appropriate modification of

Incorporating Best Practices

institutional management structures while

scaling up, standardisation, automation

SKS provides basic financial services with

of back-end processes, the introduction

the belief that the poor have a strong

of appropriate control systems at various

understanding of which businesses to

levels, and using feedback mechanisms

start and how best to employ working

to continuously innovate and improve.

capital. Loans are provided through

Loan Amount Outstanding

Client Outreach

100000

3,000

75000

2,000

50000

25000

1,000

0

2001 2002 2003 2004 2005

2001

2002

2003

2004

2005

Year

Year