Akula to Address Purpose and Profitability of Microfinance

WINSTON-SALEM, N.C. — Vikram Akula, founder and chief executive officer of SKS Microfinance of India and one of Time magazine’s 100 most influential people in 2006, will speak on the purpose and profitability of microfinance at Wake Forest University’s Babcock School of Management at 6 p.m. Sept. 6.

The event, which is free and open to the public, is the first lecture of the 2007–2008 Babcock Leadership Series and will be held in Room 1312 of the Worrell Professional Center on the Winston-Salem campus of Wake Forest.

Akula is known for using microfinance principles in India to spur economic development by providing small business loans—some as small as $20—to poor women in remote villages.

The possibility of encouraging similar economic development in the Winston-Salem area prompted Ajay Patel, dean of the Babcock Graduate School of Management, and Patrick McMullen, associate professor of management, to invite Akula to Wake Forest.

“Why can’t we do something like this in our own backyard?” Patel said. “Is there learning we can take from this and apply in our own communities?”

Patel also believes microfinance is a concept Babcock students need to understand to gain new perspectives on traditional financial issues. “Vikram has the ability to show business and entrepreneurial students that they can combine their education with a social conscience to go beyond profits and improve their communities,” Patel said.

McMullen, who was among a group of faculty members who took Babcock students to India in May, witnessed the positive impact SKS Microfinance loans had on the remote village of Channapatna near Bangalore. “Until Muhammad Yunus won the Nobel Peace Prize last October, I thought microfinance was purely financial. I didn’t realize it was also a social issue,” McMullen said. “By giving mothers a sustainable vocation, their children are going to school instead of foraging or begging for food, and literacy is improving. When this happens, the standard of living increases, which benefits everyone.”

Akula founded SKS in 1998 in response to microfinance’s inability to scale to large populations. Since then, SKS has provided nearly $240 million in loans and life insurance to more than 900,000 poor women across 16,000 villages and slums in India, while maintaining a 99 percent repayment rate.

With a growth rate of 170 percent—one of the fastest in the industry—SKS adds 50 new branches and 85,000 new customers each month. The company has attracted major equity investments from venture capitalists such as Vinod Khosla, co-founder of Sun Microsystems, and Ravi Reddy, co-founder of Think Systems.

SKS’s smart-card-based loan distribution system has also drawn the attention of Visa International, which has provided the organization with cell phone–based card readers.

The Babcock Leadership Series, organized by Wake Forest MBA students, focuses on current issues affecting business.