SKS, Citi in Rs 180 crore microfinance tie-up

HYDERABAD: SKS Microfinance and Citibank have announced a Rs 180 crore rural programme in which the latter will purchase loans originated by the former through microfinance network in 11 states.

The programme will deliver income-generating loans of Rs 5,000 to Rs 20,000 to a population of over 2 lakh un-banked customers in 7,000 villages by the end of March 2008.

Unlike conventional microfinance schemes, the risk on each individual loan originated by SKS will be shared by Citi, while the non-profit Grameen Foundation will provide a limited guarantee to SKS, which will charge clients a service fee.

“We are pleased to partner with Citibank in this ground-breaking initiative to bring greater financial inclusion to India’s poor,” Vikram Akula, CEO, SKS Finance said.

“The innovative financing structure provides risk participation and funding diversification that will support SKS’s significant growth plans,” said Robert Annibale, Citi’s Global Director of Microfinance.