SKS Micro plans to launch operations in China

Julia Lizama

Julia is a Media Analyst Intern at Wokai's Beijing Office.

We have some good news to share with supporters of microfinance in China. Last week, SKS Microfinance, one of the largest and fastest growing microfinance institutions (MFIs) in the world, announced their plans to launch operations in China. SKS currently has more than 1,200 branches throughout India and holds over $350 million in assets. They are eyeing China as the next destination for expansion, and if their plan proceeds successfully, it would signify a huge step forward in promoting microfinance in China.

 

Photo credit: www.sksindia.com

How is it beneficial for China? SKS benefits from sponsorships with leading institutions such as Citigroup and Barclays PLC. Their expansion in China will not only broaden the pool of funds for Chinese borrowers, but will also grab the attention of other MFIs who have yet to consider China for microfinance. We shouldn’t be too excited yet, however. Reporters anticipate that in all likelihood, SKS will have to face many regulatory challenges before operating in China.

 

Photo credit: images.businessweek.com

The news comes at an opportune time, given China’s current economic hardship. China’s rapid and immense growth in recent years has grabbed headlines all over the world. Yet the recent global economic meltdown is posing serious challenges to the dynamic economy. China’s economy is mostly export-driven. As consumers worldwide hold onto their wallets, demands for and purchases of Chinese goods will inevitably decline. China will have a tougher time sustaining the export-driven growth model. In turn, as China cuts back on domestic production, many workers will lose their jobs. Some of you following the news might have heard that more than 20 million migrant workers have lost jobs this year. In anticipation of growing unemployment and economic hardships ahead, SKS’s announcement to expand their operations in China is a welcoming news for those concerned about poverty alleviation and rural development in China.

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