Favourable laws needed for microfinance boom: Akula
Vikram Akula, the founder and CEO of SKS Microfinance, has changed the lives of millions in this country through micro-lending. In an interview with Prabir Biswas, Akula talks about his vision, SKS and why it is different from others working in the sector. Excerpts:

Having grown up in the US, and with the background you have, you could have settled down there itself. What made you give up the American dream and opt for the Indian one?
I had shifted to the US when I was three. I used to come back to India during school holidays, and was disturbed by the poverty in this country. And over time, the experience became jarring and I decided that I will do something to help the poor and the disadvantaged in this country when I grow up.

Has the decision to come back and work in India been worthwhile? Any regrets?
Not at all. I am rather happy that I have been able to make a difference to the lives of so many people in this country through microfinance. India is a diverse country with many cultures. And with the economy booming, it is really exciting to be in India. I love India.

Why did you choose Hyderabad as your place of operations?
I was born in Hyderabad. I am well versed with the culture of the place. I know the people. And I chose Telengana as the people are really impoverished there.

Any other place you are working in India?
Yes, our operations are spread over 15 states and in around 25,000 villages. We work from Rajasthan to West Bengal, and from Uttaranchal to Kerala. We provide microfinance in education and healthcare.

What are the challenges faced by microfinance in India?
There is a lack of understanding on microfinance amongst the politicians and bureaucrats in this country. We also need favourable regulations from the government.

Shah Rukh Khan's character in Swades is based on your life. How do you feel about it?
I do not think it is true. Just because the story resembles my journey in India, many people think that the character is based on me.

Time magazine rated you as one of the 100 most influential people in the world in 2006. Why do you think you were on the list?
SKS brought in a new generation in microfinance. We found a model and scaled it up. We adopt a commercial approach (we are a profit-making company), draw practices from the business world and use technology. We achieve 200 per cent growth every year. Microfinance was already there in India when I founded SKS in 1998. But it was not picking up due to lack of access to capital, less capacity to scale up and high costs.

What are the technology innovations that SKS has brought into microfinance?
Use of automated management information system for all transactions that helps our loan officers to process loans. We need this system as we have 6,500 loan officers who are only 10+2 educated.

Is SKS the best in this business?
I can't say that as I consider microfinance as a movement. There are many other microfinance institutions which are doing a good job. But yes, we are the biggest.

Whom do you provide loans to?
We only lend to the non-farming sector. We have a vibrant non-farming economy in rural India.

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