A recent issue of “Business Today” carries an article on Vikram Akula, CEO & Founder of SKS Microfinance. The 39 year old US returned Akula started SKS in 1997 with the dream to offer microcredit to millions of poor families.
Although born in India, Akula spent many years in the US where he got his BA from Tufts University, MA from Yale and PhD from the University of Chicago. He was a consultant with McKinsey & Co before he launched SKS.
His dream is to scale SKS to 5 million clients by 2010. So far, his firm has provided $ 400 million in unsecured loans to over 1.4 million poor women and their families in more than 20,000 villages. SKS was first set up as an NGO . The first foundation to support SKS was a small, volunteer Indian Amercian organization called The India Development Services which gave him $ 10,000. Later Akula has attracted private equity from foriegn investors like Sequoia Capital and Vinod Khosla to grow into a NBFC.
SKS has been a success story. He has been able to maintain a 99 % repayment rate. As of December 2007, SKS has 1.4 million clients with 595 branches and a staff of 6100 to service their requirements. He was selected to be one of TIME magazines’ 100 Most Influential People in the world for 2006.
It is reported that SKS is adding over 50 new branches and 130,000 new customers each month and growing at an annual rate of 200 %.
SKS currently only targets women both because they are the most marginalized and because they tend to use resources more productively than men. Social science research has shown that women tend to undertake small, manageable activities rather than risky ventures and they invest the majority of their income into the household and for their children.
A very creditable success story of an entrepreneur who followed his dreams and made them a reality.