SKS Microfinance Names Ravikumar Chairman as Founder Akula Quits
SKS Microfinance Ltd. (SKSM), an Indian lender to the poor backed by Sequoia Capital, said founder Vikram Akula has stepped down as chairman, in the company’s second high-level departure since its listing last year.
SKS Microfinance named P.H. Ravikumar, a director on the company’s board for the past five years, as interim chairman, according to an e-mailed statement yesterday. Akula will be a consultant till March 2012, according to the statement.
Akula has struggled to revive earnings at the company, modeled on Nobel laureate Muhammad Yunus’s Grameen Bank, after the southern Indian state of Andhra Pradesh unveiled tougher collection rules for microlenders. Akula has presided over an 88 percent drop in the company’s shares since it began trading in August 13, 2010 and three straight quarters of losses.
SKS’s shares surged 5 percent yesterday to 115.45 rupees, its first gain in 11 days. The benchmark Sensex fell 2.3 percent. The announcement came after close of trading.
The 43-year-old’s exit follows the ouster of Chief Executive Officer Suresh Gurumani in October last year.
SKS began operating in 1998 as a nongovernmental organization led by Akula, a doctorate in political science from the University of Chicago. Akula, a former McKinsey & Co. consultant, studied the training of unskilled workers at McDonald’s Corp. and Burger King Holdings Inc. in 2005 and used the learnings for loan officers at SKS.
Microlenders, including SKS, which offer loans to the poor starting from $100, saw their collections plunge after Andhra Pradesh in October 2010 capped the interest microfinance companies can charge and barred them from coercing borrowers to repay debt following suicides by farmers unable to pay debt.
India’s government is considering a bill that will have the Reserve Bank of India regulate the industry. The Micro Finance Institutions (Development and Regulation) Bill will make it necessary for all micro lenders to register with the central bank, create a reserve fund from profits, and audit their results each year.
Sequoia, which backed LinkedIn Corp. and Google Inc., owns about 14 percent in SKS, according to data compiled by Bloomberg.
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