The Hindu Business Line : SKS Micro sees scope in cross- selling products

Chennai, Nov. 20 With 5.5 million members (borrowers) under its belt, Hyderabad-based SKS Microfinance sees big scope in cross-selling physical and financial products to them.

“We realised that about six lakh of our members borrow money to set up kirana shops (small retailers),” says Mr S. Dilli Raj, Chief Financial Officer, SKS Microfinance.

As a pilot project, the microfinance NBFC picked up some 1,400 kirana shop owning members and wove them into a 3-way tie-up involving the members, SKS and the suppliers of goods.

This way, SKS was able to aggregate purchases for the retailers and hence get them a discount too. SKS also has the goods delivered to the shop directly. The company provides working capital loans to shop keepers, free of interest, but the suppliers of goods pay SKS a fee.

Model working well

Mr Raj said it is still too early to assess revenue inflows, but said the model was working well and SKS would extend it to more of its members.

SKS has also firmed up tie-ups with Nokia and Bajaj Allianz for vending mobile handsets and insurance products.

SKS Microfinance is India’s largest microfinance institution, with a loan book of Rs 3,400 crore as of October 30. It has a networth of Rs 770 crore.

TN foray

Today, the company announced its entry into Tamil Nadu. The State has about 1.5 crore people living ‘below poverty line’ with credit demand of Rs 7,502 crore, Mr Dilli Raj said at a press conference here.

More Stories on : Financial Institutions | Credit Market | Tamil Nadu

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