Life after Vikram Akula at SKS Microfinance: Some unanswered questions

It seems unlikely that Vikram Akula’s exit will transform SKS Microfinance into a better-governed and -managed microfinance company. Only time can tell if and whether the exit of Vikram Akula would bring better times to SKS micro-finance, its investors and clients

The board of SKS Microfinance is said to be meeting in Mumbai today and it has been widely speculated that Vikram Akula is all said to resign from SKS Microfinance as its executive chairman. While the reasons for this are not exactly known, it has been suggested that the poor performance of the company during the last quarter has brought increased pressure on Mr Akula to resign.

Whether it happens or not is something we will hopefully know in a short while today. That said, if indeed Vikram Akula quits as has been extensively reported in the media, what are the implications for SKS Microfinance as a company?

Three questions are extremely relevant for investors and other stakeholders:

a)    What will happen to SKS in its post Vikram era? Would the corporate governance issues and operating practices change for the better?

b)    What about Vikram Akula’s successor and others at the helm of SKS (if and when he quits)? Will they be able to shepherd SKS Microfinance through its turbulent lines? What is their understanding of microfinance? What is their track record of governance and management?

c)    What about the mutual benefit trusts (MBTs) and the low-income people to whom they belong? Who will control them? Who will safeguard their interests in SKS Microfinance? Who will assume responsibility for the huge (notional) losses caused to the MBTs owned by the low-income people?

A small divergence is necessary here. It is important to note that while many corporate and other investors have divested their shares, the MBTs have continued to hold (a majority of) their (huge) investments despite the steeply falling share price of SKS Microfinance (which stood at Rs112.90 per share today). Please recall that a little after SKS got listed, the shares were selling close to an all time high of Rs1,490.70 per share —this represents a fall of almost 92.43% from this super (share) price indeed.

                                    Ownership Pattern

That said, to set the record clear, it is indeed ironical that Vikram Akula is being pressured to resign by a board that was, at least in part, responsible as much, for many of the happenings at SKS Microfinance as him.

Specifically, it can be said that this board has remained a mute spectator (and thereby, perhaps even endorsed) the serious corporate governance issues and questionable operating practices reported at SKS microfinance in the public domain – (

And the board (with some common members) was undoubtedly a party to the huge growth story of SKS Microfinance during the period 2006 to 2010 as shown in table below:
It must also be noted that much of this growth apparently led to increasing frauds and deficient operating practices at SKS Microfinance as has been reported previously (Increasing frauds, internal lapses at MFIs: Need to strengthen supervisory arrangements to protect the poor,)

And last but not the least, this board, by and large, again remained quiet during the unceremonious removal of Suresh Gurumani, the then CEO (through a hurriedly convened board meeting and especially conducted on a Sunday), after he had led SKS Microfinance through a spectacular initial public offer (IPO) in 2010

Therefore, whether it was the interest-free loan to the founder MD to enable him to buy shares in SKS Microfinance or the unceremonious sacking of the CEO after the successful IPO or the burgeoning growth of SKS Microfinance, it is clear that the SKS board has to bear ultimate responsibility.

That being the case, it seems unlikely that Vikram Akula’s exit will transform SKS Microfinance into a better governed and managed microfinance company. Only time can tell if and whether the exit of Vikram Akula would bring better times to SKS micro-finance, its investors and clients…

(The writer has over two decades of grassroots and institutional experience in rural finance, MSME development, agriculture and rural livelihood systems, rural/urban development and urban poverty alleviation/governance. He has worked extensively in Asia, Africa, North America and Europe with a wide range of stakeholders, from the private sector and academia to governments)


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10 years ago
Nice. I like this post its very informative thanks for share it. Microfinance is usually understood to entail the provision of financial services to micro-entrepreneurs and small businesses, which lack access to banking and related services due to the high transaction costs associated with serving these client categories. The two main mechanisms for the delivery of financial services to such clients are relationship-based banking for individual entrepreneurs and small businesses; and group-based models, where several entrepreneurs come together to apply for loans and other services as a group.
omprakash yadav
1 decade ago
sks microfiance ltd.Vikram akula anounce that he resion sks mfi
Rajan Alexander
1 decade ago
Hi Ramesh!

There are two key points:

a. Dr Akula who popularly known as Dracula what ever it was, was a NGO fellow. Now all those on the board represent financial vultures. Their true face

b. The board was to reposition SKS as a rural finance company. This is good. The slur on M/f by SKS posing as a MFI comes to an end. They position makes Akula redundant and could be one reason why they got rid of him but prehaps not they only one

c. Third, if they reposition as a rural finance company what happens to their priority sector loans they now enjoy?
Deepak kumar suman
1 decade ago
sksmicrofinance Stock market

Total Shareholder Return, Stock market boom, Share price, Stop price
MD Azharul Islam
1 decade ago
SKS Was ALive Or Finish
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