SKS Microfinance founder and former executive chairman Vikram Akula is the nominee from SKS Trusts seeking a board seat in SKS Microfinance. SKS Trusts chairperson Biksham Gujja, also mentor to Akula, has vowed that SKS Trusts will pursue all legal channels, including approaching the Company Law Board besides various regulatory authorities, if SKS board rejects the nomination. The Trusts recently became the largest shareholder with 12.6% shareholding and reiterated its long-standing request for suitable representation on the board. In an interaction with BV Mahalakshmi, Akula says if elected to the board, he would bring ethics in the group-lending model in the microfinance industry and help SKS Microfinance regain public confidence. Edited excerpts:
If elected to the board, what will be some of your immediate objectives?
First, I have come to realise that the character of shareholders is important. In particular, in social enterprises, investors have to take a long term view. I am all for creating shareholder value, as long as it is done in a way that ensures borrowers receive high quality, transparent financial services. If you do that, everybody wins — borrowers as well as shareholders. But if you try to manage for the short term, it can have negative unintended consequences. If I were to join the SKS board, I would strive to ensure that SKS is taking this long term view and that it has shareholders who believe in this approach.
In terms of operations, the group-lending model involves intensive customer interaction and a high degree of transparency with borrowers. There’s a certain ethic to it. In the hyper-growth era of the sector, that ethic was lost. I would like to see SKS take corrective steps to bring that ethic back. This would involve training all field staff and then retraining borrowers to get the system back on track — as I called for before I left SKS. I think this will help SKS regain public confidence and, in so doing, perhaps help garner popular support to get the Microfinance Bill passed in Parliament.
It was earlier reported that you have started a mobile banking company with a