SKS Microfinance takes steps to prevent employee fraud

Some employees of SKS Microfinance have committed fraud worth Rs 15.8 crore in the last financial year, the micro lender said in its annual report.

SKS has terminated the services of the employees involved in the fraud and has written off Rs 14 crore. SKS is also in the process of taking legal action against those employees.

According to the auditors of SKS Microfinance, there was cash embezzlement by the employees to the tune of Rs 2.5 crore. In addition, loans were given to non-existent borrowers to the tune of Rs 13.3 crore.

SKS Microfinance says that there is employee fraud is an inherent risk in its business as the transactions are cash-based.

SKS Microfinance has also taken many steps to lessen the risks of employee fraud such as procuring indemnity bond from every field staff, with personal guarantee of a third person. (With Agency Inputs)