Vikram Akula, For-Profit Microfinance Pioneer, Explains the Roots of His Motivation Vikram Akula: The Poor Know How to Help Themselves
Some of the most important lessons I learned about alleviating poverty came from my experience living and working in India’s rural villages. After graduating from Tufts in 1990 I went to India and worked for the Deccan Development Society, a nonprofit based in Hyderabad in southern India. DDS was the only nonprofit that responded to a raft of query letters I sent as a job-seeking senior, so it was not hard for me to decide to head to Hyderabad after graduation.
I grew up in upstate New York but I was a wide-eyed idealist, determined from an early age to do something about the extreme poverty I saw on family summer vacations in India. I was the do-gooder to end all do-gooders. In college, instead of going to parties on Friday night, I volunteered at a local homeless shelter. In my freshman year I wrote in my journal that I wanted to “eradicate poverty with the discipline of a Marine.” Corny as that may seem, I was utterly sincere about that goal.
Yet the truth is, I didn’t know much about how to solve poverty. After a month of volunteering (basically observing projects focused on immunization, agriculture and social services, and helping where I could), the head of DDS gave me a big break: leading an expansion project in a remote village in rural Andhra Pradesh, hours from Hyderabad. There was no electricity or running water and the nearest town was miles away. No one else at DDS wanted this job so I seized the opportunity. I was thrilled, but quickly humbled by village life when I saw firsthand how difficult small tasks are without the modern conveniences that the developed world takes for granted. Villagers had to show me how to do the most basic chores, from drawing water from a well; to gathering wood to make a fire and cook; to washing clothes by whacking them on stones.
Biksham, the director of DDS was a calm, laconic man who wasn’t moved by my earnestness. In his experience, young people, no matter how eager and dedicated, moved onto other things when faced with the reality of working in India’s poorest rural areas. By then, DDS had been working with India’s poor for about seven years. But Biksham told me, “The poor know a lot more than we do about how to help themselves. We’re not that much use to them in that sense.”
I didn’t really understand what Biksham meant. Of course we could help the poor! I could get access to new agricultural techniques or study scientific dairying procedures and convey valuable knowledge to them. The poor were uneducated, we were educated and we could help them.
But once I was living in the field (literally) I started to understand what Biksham meant. In India there were many examples of projects intended to help the poor that often only backfired. There were government subsidized loans for the poor to buy high-milk-yielding buffaloes—but the buffaloes couldn’t handle drought conditions and died. A project that touted capital-intensive agriculture led to a drop in water tables that caused communities to suffer.
The longer I spent in the field, the clearer it became that the people who knew the most about helping the poor were the poor themselves. It struck me that the poor were seldom asked what they actually needed. This idea was vividly captured in a book I read at that time called “Rural Development: Putting the Last First” by Robert Chambers, a development scholar at the Institute for Development Studies in England. NGO executives and bureaucrats have limited direct engagement with poor people. They get information from large survey questionnaires or brief visits to villages. Their top-down approach to rural poverty meant they got incomplete information and ended up designing inadequate programs that sometimes proved harmful. In reality, poor people themselves are actually far more knowledgeable about their situations than outsiders, and they also have ideas about how to improve things.
By living and working in a village I saw the poor knew far more than I did. I realized that we couldn’t help the poor. What we had to do was help the poor help themselves. This became my goal. Microfinance—in that it gave the poor the tools they needed to ascend from poverty-- was a critical tool towards that end. The seeds of an idea that would become SKS were planted in my mind.
Vikram Akula is the Founder and CEO of SKS Microfinance, the largest microlender in India, and the largest anywhere traded publicly on a stock exchange.
He is also the author of A Fistfull of Rice: My Unexpected Quest to End Poverty Through Profitability.