Shares for the largest microlender in India plunged more than five percent for a second day in a row. Is the open market the place for microfinance?
When the company announced its $347 million IPO it heightened an ongoing debate in the microfinance community about the balance between scaling microlending to reach more people and protecting the mission of poverty alleviation from the potential dangers of public markets and shareholder obligations.
Today's tumble came after SEBI, the Bombay Stock Exchange where SKS shares are traded, has asked for an explanation of the hasty exit of Gurumani. Markets don't like unknowns, so the potential for scandal at the top has investors scared despite impressive growth and profits last quarter. If the stock continues to tumble it could be a set back to the proponents of public offerings.
WATCH: The godfather of microfinance, Grameen Bank Founder, Muhammad Yunus recently debated this issue with Vikram Akula, Founder and Chairman, SKS Microfinance at the Clinton Global Initiative.
READ: The Economic Times has a more detailed analysis of SKS Microfinance leadership and governance.