SKS Microfinance, in an official filing with the Bombay Stock Exchange, has said that it will bring down the lending rate to 24% across states. This has been done after the promulgation of the Andhra Pradesh government ordinance that seeks to regulate (control) activities of micro finance institutions.
SKS further clarified that as Andhra Pradesh accounts for almost 27% of the total micro-finance portfolio of the company, the happenings in AP could have a material impact on the company’s revenues and profitability - if things are not resolved and they continue as they are now
“The proposed change in operating model, disruption in customer connectivity at the field level, the resultant reduction in collection in AP and interest reduction... are likely to have a material impact on the company’s revenues, profitability and asset quality of AP portfolio,” said the SKS filing.
As a result, the share price of SKS dropped further and closed at Rs 960.9 per share (down 3.91%) on Tuesday.
Please read the official SKS document...(Please click on document below to open a full size document for better readability)
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