GSVC Finalist Attracts International Attention

SKS Microfinance Pvt. Ltd. and its founder, Vikram Akula, finalists in the 2002 National Social Venture Competition (now the Global Social Venture Competition – GSVC), have recently been recognized for their leadership in the development of the “next generation” of microlending in the Third World.by both the Wall Street Journal of May 15, 2006, and TIME Magazine in its special issue of May 6, 2006, devoted to 100 People Who Shape Our World.

Mr. Akula’s firm, then known as SKS Infotech, was entered in the 2002 competition at the Haas School as “A for-profit provider of technology solutions to emerging microfinance institutions and their clients with the dual purpose of aiding to bridge the digital divide and making the practice of microfinance more sustainable”.

When Mr. Akula launched SKS in 1998 he saw the possibility of applying modern technology to the concept of microlending pioneered by the non-profit Grameen Bank of Bangladesh, thus creating the efficiencies necessary for a for-profit enterprise. SKS Microfinance is now one of the fastest growing microfinance organizations in the world, having provided over $52 million in loans to 221,000 women clients in poor regions of India. It has also shown a healthy profit for the last three years, keeping its default rate below 2% by using modern financial software.

TIME placed Mr. Akula among its “Builders and Titans” and lauds him for “finding novel ways to support India’s poor,” citing SKS Microfinance’s use of advanced technology to make venture capital available to people in India who live on less than $2 a day. It notes that SKS is now starting to dispense loans, typically $116, on smart cards that its loan officers use to record repayments electronically, allowing for real time data and low default rates. The Wall Street Journal, in its May 15 article entitled “Entrepreneur Gets Big Banks to Back Very Small Loans,” notes that Mr. Akula and SKS Microfinance are starting to come to the attention of big business intrigued by the potential of India's rapidly growing economy and market of more than a billion consumers. Citigroup Inc., ABN Amro Holding NV and HSBC Holdings PLC are among those that have provided millions of dollars for SKS to lend out.

SKS exemplifies the founding vision of GSVC: a “double bottom line” firm with a strong socially responsible vision and a healthy financial structure allowing for reasonable profits. The Lester Center is proud to sponsor organizations such as GSVC that help the international community develop entrepreneurial concepts that incorporate a compelling social component.