Vikram Akula, the poster boy
of Indian microfinance, will soon be stepping down as CEO of SKS
Microfinance. Vishwanath Pilla finds out what made Akula relinquish his
position after bagging the largest private equity deal in the history
of the microfinance sector.
Here is a transcript of Vishwanath Pilla’s comments on CNBC TV18.
a country where mainstream banking system still eludes the poor, Vikram
Akula built a successful enterprise — SKS Microfinance — by making
finance available to the poor. Today, SKS is the fastest-growing
microfinance institution in the world. Recently it raised Rs 366
crore — the largest PE investment in the world. Sandstone capital led
which included Kismet Capital and SVB India Capital Partners, the
existing investors of SKS Microfinance. However in the wake of the
deal, Vikram Akula chose to hand over the mantle of the company to
Suresh Gurumani from Barclays Bank. Akula will now remain as full-time
director on board.
says, “The reason for the change is to allow me to focus on new
strategy initiative. We are primarily doing micro-credit and a little
of insurance. The whole range of new financial services the poor need,
they need insurance products, products for savings and also new
technologies like mobile banking."
latest PE funding comes at a crucial juncture when most microfinance
institutions in the country are facing credit crunch. Now it plans to
increase its customer base to eight million in next two years from
current 3.3 million existing customers. Though the company refused to
disclose details about current equity structure, there are reports that
Vikram Akula made a killing by offloading his stake in the company.
However, Akula denies such reports.
says, “The new equity we have received is a completely new public
issue. I did not sell any of my shares nor did any of the other
existing investors. As a result of this, no dilution has happened.
Dilution of shares happened to the shares sold as part of the
is planning to raise funds through more private placements before it
eventually goes for an IPO, when market conditions improve. Despite a
rise in cost of capital hurting the bottomlines, the company says it is
on track to lend Rs 5,000 crore by the end of this fiscal.