SKS Chairman Fights Loan Backlash [India]
Author: Paul Beckett, Wall Street Journal, Published on: 17 November 2010
Vikram Akula, chairman of SKS Microfinance, India's largest provider of tiny loans to the poor, called on regulators targeting the industry to focus on "rogue" actors and not destroy the whole industry with their clampdown...India's microfinance industry has been in turmoil since officials in the southern state of Andhra Pradesh said they would introduce new regulations to control the industry, which some critics contend in some cases has become overly aggressive in collections and has saddled borrowers with multiple loans. SKS and Mr. Akula have become key figures in the backlash in Andhra Pradesh...because it recently launched an initial public offering of stock on an Indian stock exchange, making it a symbol of the transformation of microfinance...to a for-profit enterprise focused on shareholder returns...Sunand Mitra, president of agricultural and rural banking at Axis Bank, said it was time for banks that provide funds to microfinance institutions to become more discriminating...He said..."banks...have to rate MFIs on a new paradigm." That could include measuring them on transparency, interest rates and other metrics so that "lending should be conditional on MFIs behaving in a more responsible manner," he said.
Related companies: SKS (Swayam Krishi Sangam)