In last six months, the micro-finance sector in India has been seen in news headlines. It is primarily attributed to SKS Microfinance. SKS Microfinance, the firm which went public successfully in Aug 2010.
In October 2010, The board of director , SKS Microfinance sacked its CEO Mr. Gurnani and appointed Mr. Vikram Akula in his place. The public news claimed that has been a result of power struggle. Many new articles speculated that Mr. Vikram Akula, a founder of SKS Microfinance used Mr. Gurnani until the company got listed successfully. To add this list of speculation, it was Ms. Malini Byanna (ex-wife, co-founder of SKS M) has accused Mr. Vikram Akula in many ways. (Ref: ET news). The bad part of this interview for SKS Microfinance was that she allegedly claimed lack of governance & malpractices followed at SKS Mifcrofinance.
Now there is one more blower for SKS Microfinance. The agents of SKS Microfinance were found illegally pressurizing borrowers. If proved, police can arrest the CEO Mr. Vikram Akula.
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They say, now putting money in micro-lending is the way to earn higher return. So the high networth individuals are also seen pouring money into this business. To my knowledge micro-lending existed in earlier days also. This business (on its bad part) has taken lives of many poor people in villages-the rural India. It's just the 'corporatization' of such business is seen in the form of SKS Mircofinance.
But on the good side of it, it does help the self help group/small group of women- small businesses by making easy finance availability. It's a good step taken by Mr. Manmohan Singh govt. by bringing in the regulator in the business of micro-financing in the form of NABARD.
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