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Shaping Our World

Shaping Our WorldBy bringing a high-tech approach to microfinance, Tufts graduate Vikram Akula has been recognized by TIME magazine as one of the world's most influential people.

Medford/Somerville, Mass. [05.04.06] Tufts graduate Vikram Akula, whose SKS Microfinance is one of the world's fastest growing microfinance institutions, has been recognized in the 2006 TIME 100 list of "people who shape our world" for his firm's innovative use of technology to improve the distribution of venture capital to the poor of his native India.

"Even though it's my name on the list, the true honorees are our clients across the country who struggle everyday to overcome poverty and inspire us with their courage," Akula said in a statement released by SKS in response to the recognition.

Akula, who graduated from Tufts in 1990 with a bachelor's degree in philosophy, is in the company of luminaries such as Bill Clinton, Pope Benedict XVI, Bill and Melinda Gates, and Elie Wiesel on the TIME list.

SKS has begun using smart card technology to distribute loans, typically amounting to $116, in rural parts of India, according to TIME. The technology is especially useful in those regions, where it is difficult or impossible to find land-based lines of communication or access to money.

According to the company, SKS has distributed $52 million to 221,000 people since its inception in 1998, with a goal of reaching 700,000 clients by March 2007. TIME reported that 800 million people in India live on less than $2 a day.

"I started SKS because I was overwhelmed by the poverty I saw in India and was looking for a way to catalyze rapid economic development for the poor," Akula said in a statement.

The system is not only more convenient, but also much safer than having loan officers walking around carrying large amounts of cash, Visa International emerging markets chief Debbie Arnold told TIME. The company is working with SKS to provide its loan officers withcell phone-based smart card readers.

Through an emphasis on transparency and real-time financial monitoring, the company is able to keep its interest rate below 2 percent, the magazine reported. The company boasts a repayment rate of 98%.

The initiative has also attracted the attention of the Silicon Valley-based nonprofit venture capital firm Unitus, which has named SKS the most promising microfinance organization in India. Unitus Vice President of Communications David Schappell likens SKS to "the little coffee shop that became Starbucks," according to TIME.

For Akula, the TIME honor—like the other awards SKS has received for its success in the field—is simply an acknowledgment of the promise of microfinance.

"It highlights the tremendous groundwork done by microfinance practitioners—both government and private institutions—in bringing finance to the poor," he said in a statement.

 

 

 

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