1996/97
Vikram Akula raises Rs 18.7 lakh from 357 people to start SKS
2004/05
Akula relocates to the US, appointing Sitaram Rao as CEO of the company
2005:
Changes SKS from a non-profit to a for-profit company
2006:
Gets Rs 11 crore equity injection from Vinod Khosla and others. More funds follow
Aug 2010:
SKS becomes the first microfinance company to list on a stock exchange.
Oct 4, 2010:
SKS board terminates the services of then CEO Suresh Gurumani
Nov 7, 2011:
SKS posts a record loss of Rs 384.54 crore for the quarter ended September 30
Nov 23, 2011:
Akula steps down as the chairperson and board member. P.H. Ravikumar takes over
Differences Between P.H. Ravikumar and Vikram Akula
The new non-executive chairman, P.H. Ravikumar denies any differences with Vikram Akula and insists that there were only "strategic differences", and these too arose after that watershed event in the history of microfinance in the country - the passing of a law by the Andhra Pradesh government in December 2010, severely restricting the activities of MFIs in the state.
The tale of woes for SKS Microfinance company in Andhra Pradesh
The law, initially brought as an ordinance in October, was prompted by reports of coercive loan recoveries by some MFIs, which allegedly even led some debtors to commit suicide. It decreed that all MFIs working in the state would have to register themselves with multiple state government bodies, declare their interest rates upfront, stop seeking weekly repayments, and much more. As a result the borrowers stopped making payments under the umbrella of this ordinance.
SKS Microfinance New Strategy
SKS Microfinance is ready to launch itself headlong into its new strategy, offering small housing loans and other fee-based services alongside microfinance. Being a listed entity SKS is forced to look at maximising shareholder value. This is not just a case of mission drift but one of a mission change. It is seeking to move from being a microfinance specialist to a regular non-banking finance company
Retrospection to understand the reasons for failure of SKS Microfinance
No doubt microfinance was a noble cause but probably converting from a non profit organisation to a profit organisation was the biggest mistake committed by Vikram Akula and add to it the Andhra Pradesh ordinance which accounts for 1/3rd of the country’s microfinance business has added fuel to fire.
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