named TIME 100: The People Who Shape Our World
(NRI, Vikram Akula delivered
over $50 million in microfinance to over 200,000 women
clients in one of the poorest parts of Southern India)
New York, May 01, 2006
NRI, Vikram Akula, (was named in the list of 100 most
influential people selected by Time magazine as who shapers of the
world. He was selected on the bases of finding Novel Ways to Support
India's Poor people. His logic is that poor people need credit to
survive. We provide small loans to poor people for income-generating
activities. We undercut loan sharks at the doorstep with collateral-free
According to Time magazine, JULIE RAWE reporter
said that Vikram Akula is using advanced technologysmart cardsto
make venture capital available to more of the 800 million people
in India who live on less than $2 a day. In the hinterland, where
there are few landlines, let alone ATMs, the founder of SKS Microfinance
is starting to dispense loans, typically $116, on smart cards, which
its loan officers had been using to record repayments electronically.
The plastic approach intrigued Visa International, which is now
pairing SKS with cell phone-based card readers. The cash-free system
is more efficient and safer too. As Visa's emerging-markets chief,
Debbie Arnold, put it, a cash-laden loan officer "might as
well carry a big bull's-eye on his back."
He supports 63 different activities divided into three
categories: livestock, trading and agriculture. "Aboutm 40
per cent loans are for livestock, 20 goes to trading and about 15
per cent goes to agriculture in areas where villagers plough their
own or leased land.
By SKS Microfinance (SKS)
Akula, 37, has already made SKS one of the fastest-growing
microlenders, having dispensed $52 million to 221,000 clients since
1998. SKS keeps its default rate below 2% by using software that
provides real-time data. When he spots a red flag, he says, "we're
on it like a swat team." Such transparency has attracted Silicon
Valley types, with David Schappell of Unitus, a nonprofit venture-capital
firm devoted to microfinance, likening SKS to the little coffee
shop that became Starbucks. Microccino, anyone?
The poverty in India is disconcerting," says
Vikram Bayana Akula. "I just thought I must do something."
That's how this story began in the interiors of arid Andhra Pradesh.
Akula, who grew up in Schenectady, upstate New York (where father
A.V. Krishna is a surgeon), encountered poverty first hand earlier
while visiting relatives in Medhak. "It's a tragedy that we
NRIs who can do a lot, are not doing enough. We have the skills
to solve the problems," he says. After returning to the US
from his stint in Zaheerabad, Akula had joined the prestigious Harvard
Divinity School but lasted only a semester. "I could not read
ethics," he says. After picking up a masters degree in
agrarian and rural development from Yale, he returned to Medhak
on a Fulbright scholarship. In the meantime, he also worked on an
India government project to help develop an alternate distribution
system. In 96, he did his PhD at Chicago University where,
predictably, his thesis was on local political empowerment. Theory
and praxis, Akula has been able to bridge the divideyet another
face of globalisation.
The year that Akula spent in Zaheerabad transformed him forever.
For the past decade, he's worked tirelessly to help the impoverished
people of this Deccan region. Inspired by Mohammad Yunus' micro-credit
Grameen Bank in Bangladesh, he started the Swayam Krishi Sangam
(SKS) in 1998 in Medhak district. He raised $52,000 from individual
contributors in the US with, not surprisingly, 50 per cent of the
money coming from NRI doctors. "The idea is to put private
sector initiative into alleviating poverty. I don't want to depend
on grants or government money.
Case Study: Raipally Siddamma
Siddamma is among the most entrepreneurial members of SKS Microfinance.
She has taken four income-generating loans for a wide range of activities
and has secured many assets. In her first year, Siddamma took a
loan of Rs. 1,500 (US $32) for rearing a goat. She then took a Rs.
2,000 (US $43) loan for vegetable vending. Still later, Siddamma
took a Rs. 6,000 (US $129) loan to purchase a mango tree, the fruit
of which she sells each mango season. Finally, Siddamma took a loan
to buy fishing nets and to contract three fishermen to catch her
daily fish, which her husband then sells in a nearby city. Through
this combination of enterprises, Siddamma has netted huge profits.
She now earns Rs. 100 (US $2.12) profit per day. This is remarkable
considering that, as a former agricultural laborer, she barely earned
Rs. 20 (US $ 0.42) each day.