Vikram Akula is the founder and chairperson of SKS Microfinance Private Ltd., a microfinance organization which provides loans to women in the poorest regions of India. SKS Microfinance was started in 1997 by Mr. Akula with a mission to empower the poor to become economically self-reliant through the provision of financial services in a sustainable manner.
Born in the city of Hyderabad in India, Vikram Akula moved to the United States when he was three years old. He witnessed India’s poverty on numerous family visits to India and this made him make a promise ‘to do something to eradicate poverty’. He holds a bachelor’s degree in Philosophy from Tufts University, having graduated in 1990. He then went on to complete a Masters degree in International Relations from Yale University in 1996 and a Ph.D. in microfinance from the University of Chicago in 2004. His doctoral dissertation focused on the impact of microfinance and poverty alleviation strategies. Prior to launching SKS, Dr. Akula was a Fulbright Scholar in India, during which he coordinated Jawahar Rozgar Yojana, a government-funded action-research project on providing microfinance for food security and generating employment opportunities in rural areas. He has also worked as a community organizer with the Deccan Development Society in Andhra Pradesh and as a researcher with the Worldwatch Institute, where he wrote articles on poverty and development. While managing SKS, Dr. Akula also joined the global management consulting firm, McKinsey and Company as a management consultant, reaching out to partners and directors at McKinsey who shared his interest in development.
Dr. Akula started SKS Microfinance because he was ‘overwhelmed by the poverty in India’ and was looking for a way to catalyze rapid economic development for the poor. He started SKS with INR 20 lakh approximately equivalent to USD 40,832 today, which he raised from friends and family. Observing the inability of microfinance to scale to large numbers, Dr. Akula started SKS based on a for-profit model. Also, SKS provides loans only to female borrowers in the belief that women tend to engage in income-generating activities and reinvest their income into their household as opposed to men who are more likely to spend their loans on personal consumption. Dr. Akula, who served as the CEO of SKS for 10 years, stepped down from the role in December 2008 to transition to the role of a full-time Director on the SKS Board and to focus on new strategic initiatives for SKS including microinsurance and investment.
So far, SKS Microfinance has provided over USD 1.1 billion in loan, maintaining a loan outstanding of USD 425 million and has disbursed loans to a total of 3,429,252 women members in poor regions of India. Borrowers take loans for a range of income-generating activities, including livestock, agriculture, trade (such as vegetable vending), production (such as basket weaving, pottery) and other businesses (photography, etc). SKS also offers interest-free loans for emergencies as well as life insurance to its members. SKS charges interest rates in the range of 21 to 28 percent. Since SKS is a non-bank financial company (NBFC), it does not hold savings deposits. Dr. Akula believes SKS is successful for three reasons: the profit-oriented model; the use of standardized and scalable business processes; and the use of advanced technology – smart cards -to dispense loans and record repayments electronically, in addition to software that provides real-time data.
Dr. Akula is also the founder of the SKS Foundation which is a US based non profit organization that supports the Ultra Poor Program, a program that attacks the challenge of extreme poverty on three levels: economic, social and health, and aims to graduate clients into being able to run a sustainable income-generating enterprise. Dr. Akula has been recognized globally for his achievements. He was recognized by the TIME Magazine as one of the 100 most influential people for the year 2006. He also won the Schwab Social Entrepreneur of the Year (India) Award in 2006, the Ernst & Young Start Up Entrepreneur of the Year Award (India) and the 2008 Karmaveer Puraskar instituted by iCONGO, the confederation of NGOs in India. For his work towards community improvement and economic development, he was also awarded the EchoingGreen fellowship in 1998.
By Bharathi Ram, Research Assistant
Additional Resources:
TIME Magazine: Vikram Akula
Echoing Green Fellowship
McKinsey and Company Alumni – Vikram Akula
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