Vikram Akula

Last updated

Vikram
Vikram Akula at the India Economic Summit 2008 cropped.jpg
Born (1968-11-07) 7 November 1968 (age 55)
Ryakal Village, Medak district, Telangana, India
Nationality American
Alma mater Tufts University
Yale University
University of Chicago
Occupation(s)Founder, SKS Microfinance
Parent(s)Akula V. Krishna
Padma Krishna

Vikram Akula (born 7 November 1968) is an American banker and the founder of SKS Microfinance (now BFIL), a micro finance company and former chairperson of Bharat Financial Inclusion Ltd. SKS was an organization that offered microloans and insurance to poor women in India. He stepped down as SKS Chairperson in November 2011 and became Chairperson Emeritus. [1]

Contents

Akula is also a founding investor and a Director in AgSri, a sustainable agriculture company focused on helping small sugarcane farmers reduce water use, and a Director in Bodhi Educational Society, which establishes schools for underprivileged children in India. [2] [3] In 2006, he was named by TIME magazine as one of the 100 most influential people in the world for his work in financial inclusion. [4]

Akula currently serves as Chairperson of VAYA Finserv Private Limited. [5] Founded in 2014, the India-based company markets financial services to low-income groups on behalf of partner banks. [6] [7]

Early life and education

Akula's father, Akula V. Krishna, was a surgeon who settled in Schenectady, New York, where Akula went to school. [8] Akula graduated from Niskayuna High School in 1986 and enrolled at Tufts University, where he graduated as a double major in philosophy and English with honors in 1990. [9] He went to Yale University for a M.A. in International Relations, and was awarded a Fulbright scholarship for an action-research microfinance project in India in 1994–95. He completed his Ph.D. in Political Science from the University of Chicago in 2004. [10] In 2019-20, he was a Distinguished Career Fellow at Stanford University.[ citation needed ] [11]

Career

Upon graduating from Tufts, Akula returned to India for a short while in 1990 and worked with the Deccan Development Society, a small grassroots rural non-profit organization. He then returned to USA and worked for the Worldwatch Institute in Washington D.C. as a researcher, where he wrote articles about poverty and sustainable development. During his Fulbright, Akula returned to the Deccan Development Society, where he helped manage the organization's microfinance program. [12] Akula saw the limitation of non-profit microfinance and proposed a more market-based approach. He outlines his philosophy in his book, A Fistful of Rice; My Unexpected Quest to End Poverty Through Profitability, published by Harvard Business Press in 2010. [2]

SKS Microfinance

In 1996, Akula completed his Fulbright and went to the University of Chicago to pursue his Ph.D, which he completed in 2004. As a Ph.D. student, he created a business plan for a for-profit microfinance company and in December 1997, Akula returned to India to set up Swayam Krishi Sangam (SKS) as a vehicle to implement the plan. Initially set up as a non-profit, SKS converted to the for-profit SKS Microfinance in 2005. [10] SKS Microfinance secured a round of equity investment of $11.5 million in March 2007, led by Sequoia Capital. [13] In November 2008, SKS raised an equity investment of $75 million, the largest equity investment raised by an MFI to that date. [14] SKS raised additional equity from Infosys founder Narayan Murthy and Bajaj Allianz, which represented the first-ever microfinance investment by an insurance company. [15] [16]

In mid-August 2010, SKS Microfinance had an initial public offering (IPO) on the Bombay Stock Exchange, which raised $350 million and was oversubscribed 14 times and which included anchor investors such as George Soros. [17] [18] According to the company's website, SKS Microfinance has disbursed more than $15 billion in micro-loans. [19]

Akula resigned from the role of Executive Chairperson on 23 November 2011 and he relinquished his role as a promoter of SKS on 3 May 2014. [20] [21]

Influences

When founding SKS, Akula drew inspiration from the work of Muhammad Yunus, the Nobel prize winner and founder of the Grameen Bank in Bangladesh, one of the world's first microfinance organizations.[ citation needed ] In a face-to-face debate with Yunus at the 2010 Clinton Global Initiative, Akula insisted that going public is the only way for an MFI to raise sufficient funds to provide micro-loans for billions of poor people in need worldwide. [22]

Controversy

In late 2010, the state government of Andhra Pradesh accused microfinance companies, including the then market leader SKS, for the suicides of poor, debt-ridden residents of the state that year. [23] [24] Two investigations into the incident, the first an independent investigation commissioned by SKS, and the second commissioned by an industry umbrella group, both pointed to SKS involvement in the suicides, and said that SKS employees had engaged in illegal practices like verbal and physical harassment, coercion, and public humiliation, in order to recover debts. [23] [24]

In an investigative article, Erika Kinetz of the Associated Press, wrote,"a profound shift in values and incentives at SKS began in 2008" when Akula left the CEO role. "Boston-based Sandstone Capital, now SKS' largest investor, made a major investment. It joined U.S. private equity firm Sequoia Capital, which funded Google and Apple and is SKS' largest shareholder, on the board of directors. Akula, who had been chief executive in the company's early days, stepped down in December 2008 but stayed on as chairman. The company brought in new top executives from the worlds of finance and insurance. SKS also began transferring more loans off its books, selling highly rated pools of loans to banks, which then assumed most of the associated risk of borrower default. That freed SKS to push out more and bigger loans. In December 2009, SKS launched a massive sales drive. The "Incentives Galore" program ran through February 2010 — just one month before the company filed its IPO prospectus." She noted that Akula tried to stop this. "In spring 2011, Akula began circulating a plan to spend $10 million to train financial counselors who would make sure clients weren't getting into too much debt and used their loans productively, according to people with firsthand knowledge of the proposal. The plan was never adopted." [24]

Akula addresses the controversy in his book, Micro-Meltdown: The Inside Story of the Rise, Fall, and Resurgence of the World's Most Valuable Microlender.

Awards and recognition

Akula has received several awards for his work with SKS.

Related Research Articles

<span class="mw-page-title-main">Microcredit</span> Small loans to impoverished borrowers

Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment, or a verifiable credit history. It is designed to support entrepreneurship and alleviate poverty. Many recipients are illiterate, and therefore unable to complete paperwork required to get conventional loans. As of 2009 an estimated 74 million people held microloans that totaled US$38 billion. Grameen Bank reports that repayment success rates are between 95 and 98 percent.

<span class="mw-page-title-main">Microfinance</span> Provision of microloans to poor entrepreneurs and small businesses

Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings and checking accounts; microinsurance; and payment systems, among other services. Microfinance services are designed to reach excluded customers, usually poorer population segments, possibly socially marginalized, or geographically more isolated, and to help them become self-sufficient. ID Ghana is an example of a microfinance institution.

Seed money, also known as seed funding or seed capital, is a form of securities offering in which an investor puts capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own, or until it is ready for further investments. Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding.

<span class="mw-page-title-main">Accion International</span> International nonprofit organization

Accion is an international nonprofit. Founded as a community development initiative serving the poor in Venezuela, Accion is known as a pioneer in the fields of microfinance and fintech impact investing.

Munnuru Kapu is a Telugu-speaking caste primarily found in the Indian state of Telangana. Traditionally, they are a community of cultivators and are distributed across Telangana. They are also present in Nanded and Latur districts of Maharashtra. Munnuru Kapus are distinct from the Kapu caste of Coastal Andhra.

Bharat Financial Inclusion Limited or BFIL is a banking & finance company (NBFC), licensed by the Reserve Bank of India. It was founded in 1997 by Vikram Akula, who served as its executive chair until working. The company's mission is to provide financial services to the poor under the premise that providing financial service to poor borrowers helps to alleviate poverty. In 2011, the company operated across 11 Indian state.

IDFC Bharat Ltd is a microfinance bank, operating in the Tamil Nadu area of South India. Since 1993, it has provided small loans to women without access to formal credit and who typically have daily incomes of less than INR 80 (US$2) per day.

<span class="mw-page-title-main">Leopard Capital</span>

Leopard Capital LP is a private equity fund manager specializing in frontier market investments. The Group is considered a pioneer investor in Southeast Asia’s Greater Mekong Subregion and the Caribbean.

Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds, hire-purchase insurance business or chit-fund business, but does not include any institution whose principle business is that of agriculture, industrial activity, purchase or sale of any goods or providing any services and sale/purchase/construction of immovable property.

Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is about an alignment of an investor's beliefs and values with the allocation of capital to address social and/or environmental issues.

AccessBank Liberia (ABL), is a microfinance commercial bank in Liberia. It is one of the commercial banks licensed by the Central Bank of Liberia, the national banking regulator.

Bandhan Bank Ltd. is a banking and financial services company, headquartered in Kolkata. Bandhan Bank is present in 35 out of 36 states and union territories of India, with 6,250 banking outlets and 3.26 crore customers. Having received the universal banking licence from the Reserve Bank of India, Bandhan Bank started operations on August 23, 2015, with 501 branches, 50 ATMs and 2,022 Banking Units (BUs). The Bank has mobilised deposits of ₹1,17,422 crore and its total advances stand at ₹1,15,940 crore as of December 31, 2023.

Small finance banks (SFB) are a type of niche banks in India. Banks with a SFB license can provide basic banking service of acceptance of deposits and lending. The aim behind these is to provide financial inclusion to sections of the economy not being served by other banks, such as small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

Kenya Women Microfinance Bank, formerly Kenya Women Finance Trust or KWFT, is a deposit-taking microfinance bank in Kenya, the largest economy in the East African Community.

StreetShares, Inc. is a financial technology company and small business funding marketplace based outside of Washington, D.C.

Microfinance in Kenya consists of microfinance facilities and regulations in Kenya which has been developing since the mid 1990s. Legislation was passed in 2006 with the Micro Finance Act which became active in 2008. By 2010 there were more than twenty large micro finance institutions in Kenya, which provided US $1.5 billion to approximately 1.5 million active borrowers. With over 100,000 clients, Equity Bank Kenya had the largest share of business loans representing market share of 73.50% followed by Kenya Women Microfinance Bank with 12.06%. Most microfinance firms as in other countries have eligibility criteria which may include gender, age, a valid Kenyan ID, a business, an ability to repay the loan and be a customer of the institution.

Bajaj Finance Limited (BFL) is an Indian non-banking financial company headquartered in Pune. It is one of the leading non-banking financial companies (NBFCs) of India with a customer base of 73 million and holds assets under management worth ₹270,050 crore (US$34 billion).

Satin Creditcare Network Limited is a non-banking finance company (NBFC), licensed by the Reserve Bank of India. It was founded in 1990 by Mr. H P Singh. The company's offers financial requirements for excluded households at the bottom of the pyramid. Satin Creditcare Network Limited is a micro-finance institution (MFI) in the country with presence in 7 states and more than 12,00 villages.

<span class="mw-page-title-main">VFS Capital</span> Indian non-banking financial company

VFS Capital Limited formerly known as Village Financial Services Ltd (VFS), is headquartered in Kolkata, was incorporated on 28 June 1994, as a private limited company before it got its present name.

<span class="mw-page-title-main">Navi Group</span> Indian financial services company

Navi is an Indian financial services company founded by Sachin Bansal and Ankit Agarwal in 2018. Navi operates in the space of digital Loans, home loans, mutual funds, health insurance, digital gold and micro-loans. It currently has $100 million in revenue with $10 million in profit.

References

  1. ↑ "Boss of Indian microfinance firm SKS steps down", BBC.com, 24 November 2011. Retrieved on 24 March 2015.
  2. 1 2 "Vikram Akula - India Development Service", India Development Service, Retrieved on 24 March 2015.
  3. 1 2 "World Economic Forum - Vikram K. Akula". World Economic Forum. Retrieved 27 December 2012.
  4. 1 2 Rawe, Julie (30 April 2006). "TIME 100: The People Who Shape Our World - Vikram Akula". Time . Archived from the original on 15 June 2006. Retrieved 27 May 2010.
  5. ↑ "Akula appointed chairman of financial inclusion start-up Vaya Finserv - Business Standard News". Business Standard. 11 December 2014. Retrieved 9 March 2015.
  6. ↑ "Vaya Finserv Pvt. Ltd: Private Company Information - Businessweek". Bloomberg Business. Retrieved 9 March 2015.
  7. ↑ "Vikram Akula's Next Big Gig", Business Today, 1 March 2015. Retrieved on 24 March 2015.
  8. ↑ "NRI named TIME 100: The People Who Shape Our World" NRIInternet.com, 1 May 2006. Retrieved on 19 March 2015.
  9. ↑ "Niskayuna Alumni Hall of Fame Honorees" Archived 2015-04-02 at the Wayback Machine niskayunaschools.org, Retrieved on 19 March 2015.
  10. 1 2 "Vikram Akula | Echoing Green", Echoing Green, Retrieved on 17 March 2015.
  11. ↑ "Vikram Akula".
  12. ↑ "Vikram Akula | Tufts Fletcher School", Tufts University, Retrieved on 17 March 2015.
  13. ↑ "Sequoia Invests $11.5 Million in Microfinance Fund" CNBC.com, 29 March 2007. Retrieved on 8 July 2015.
  14. ↑ "MICROCAPITAL STORY- SKS Microfinance Raises $75.4m in Equity Capital in Transaction Led by Sandstone Capital" Micro Capital, 14 November 2008. Retrieved on 8 July 2015.
  15. ↑ "Narayana Murthy's Catamaran Invests Rs 28Cr In SKS" VCCircle, 26 March 2010. Retrieved on 8 July 2015.
  16. ↑ "Bajaj Allianz picks 2.5% stake in SKS Microfin" The Financial Express, 3 July 2009. Retrieved on 8 July 2015.
  17. ↑ "SKS Microfinance Shares Jump in Mumbai Trading Debut" Bloomberg.com, 15 August 2010. Retrieved on 24 March 2015.
  18. ↑ "SKS share offer oversubscribed 14 times", TheHindu.com, 2 August 2010. Retrieved on 24 March 2015.
  19. ↑ p "SKS: Our Work: What Impact We Make: Numbers & Stats". Archived from the original on 12 July 2015. Retrieved 9 July 2015. "SKS: Our Work: What Impact We Make: Numbers and Stats", Retrieved on 8 July 2015.
  20. ↑ "Vikram Aklula no longer promoter of SKS micro finance". Times of India. 5 March 2014. Retrieved 9 March 2014.
  21. ↑ "A Microlending Star Moves On", "WSJ.com", 23 November 2011, Retrieved on 8 July 2015.
  22. ↑ "A Big Split Over Microfinance", Forbes, 10 October 2010. Retrieved on 17 March 2015.
  23. 1 2 "Hundreds Of Suicides In India Linked To Microfinance Organizations". Business Insider. Retrieved 5 December 2017.
  24. 1 2 3 "SKS Under Spotlight in Suicides". Wall Street Journal. Associated Press. 24 February 2012. ISSN   0099-9660 . Retrieved 5 December 2017.
  25. ↑ "Schwab Foundation for Social Entrepreneurship - Profiles". Schwab Foundation. Retrieved 27 December 2012.
  26. ↑ "Entrepreneur of the Year 2011: Start-up companies - Ernst & Young - India". Ernst & Young. Retrieved 27 December 2012.
  27. ↑ "EOY 2009 winners - Ernst & Young - India". Ernst & Young. Retrieved 27 December 2012.
  28. ↑ "India's 50 Most Powerful People 2009" Bloomberg, Retrieved on 19 March 2015.
  29. ↑ "The TightRope Walker" Archived 2015-04-02 at the Wayback Machine Forbes, 19 December 2009. Retrieved on 19 March 2015.
  30. ↑ "Dr. Vikram Akula wins Special Social Achievement Award", Retrieved on 8 July 2015.
  31. ↑ "Vikram Akula - 1998 Fellow". Echoing Green. Retrieved 27 December 2012.
  32. ↑ "Karmaveer Puraskar - Awardees by Category". Karmaveer Puraskar. Retrieved 27 December 2012.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.