SKS Microfinance gains 8.4%

Microfinance Focus, December 22, 2010: SKS microfinance which hit an all time low of Rs. 559 on Tuesday gained 8.4% today and was trading at Rs. 664 at 16.00hrs on Bombay Stock Exchange (BSE). The gain came after it was reported in the media that the Reserve Bank of India (RBI) has asked banks not to choke funds for microfinance institutions.

Today, SKS shares touched an intraday high of Rs. 673 and an intraday low of Rs. 613. Its shares hit a record high of Rs. 1490 on September 28, 2010. However, post promulgation of Andhra Pradesh microfinance ordinance, the company’s shares have become volatile with downward bias.

In the wake of AP crisis banks have slashed down their lending to microfinance institutions and are waiting for RBI’s Malegam Committee report on the sector to decide on further course of action. Banks were so far lending to microfinance institutions to meet their priority sector lending requirements.