Book by Vikram Akula
Reviewed by Andrew Tyndale
Well, Vikram Akula’s “my life so far” book is certainly an easy and engaging read, seductive in its story-telling of the rise and rise of SKS Microfinance, arguably the organisation that has done most to bring Wall Street to the development coal face.
I was prepared to dislike Akula, as I have been actively involved in a rival microfinance network for more than 15 years, where the prevailing view is to look down on the “profit-maximisers” as exploitative of the poor we are trying to serve.
So my antennae were up, looking for self-serving justifications from a rogue operator who, by reputation, flaunted his fast cars as an illustration of his success.
But I confess, I have come to admire and, dare I say it, like the fellow laid bare in these pages. He has undoubtedly sacrificed personally, clearly thought through the challenges, and alighted on a solution which is compelling and effective: the capital markets must be tapped in order to address the scale of the poverty challenges we all face.
The temptation to sugar-coat an autobiography must be intense, especially for a driven and successful man and one does wonder how much has been re-created through the lens of ego (as one ex-colleague, named in the book, suggests).
It is unfortunate that the book, released in 2011, doesn’t address the highly controversial 2010 IPO of SKS, the ensuing controversy or the current and potentially catastrophic regulatory debacle in Andhra Pradesh, largely attributed to SKS and its very aggressive approach. SKS has been epitomised as the “growth at all costs”, “roll out the one-size-fits-all product suite over whoever is in your way” microfinance institute (MFI). It would have been interesting to hear Akula’s defence of the accusations of improper lending (and harsh collection) practices, the encouragement of over-indebtedness, and the deliberate targeting of the clients and staff of other MFIs.
Microfinance is a highly competitive business now, largely through the successful replication of successful programs by SKS and other major for-profit players and none competes as ruthlessly as SKS.
But has growth, rather than serving the poor, become the goal? Akula talks of hitting “Google territory” (8 million clients touching 40 million people), where the size of the operation enables the ability to run multiple development services through the platform, for the benefit of the clients. He speaks of insurance, health and education services, product purchasing power, political influence, housing loans and de-worming programs…all enabled by reaching critical mass.
Perhaps Akula and SKS are realising the dark side of attracting commercial capital: that even Google Territory is not enough. SKS’ backers include hedge funds and VC investors, never known for encouraging moderation, or for their love of doing good works once an acceptable level growth has been achieved… because it may never be.
Perhaps Akula will pen a part two where all is not rosy and the white knight forces of capitalism show their dark under-belly; where selling your soul (and equity) to the devil comes at a price?
Or perhaps he will ride into the development sunset, content that he has helped tens of millions, and deservedly satisfied with his break-throughs in accessing capital markets for social good.
Either way, the story of Akula and SKS, offers considerable food for thought – and an enjoyable read – for all in the emerging Australian social/impact investment sector.
Andrew Tyndale is a career investment banker that left in 2008 to found Grace Mutual (www.gracemutual.org.au), a social investment group bringing capital to social challenges. He is the past Chair of Opportunity International Australia (www.opportunity.org.au).