Chairman quits India's largest microlender SKS

The founder-chairman of India's largest lender to the poor, SKS Microfinance, on Wednesday announced that he was stepping down after the firm reported big losses. Vikram Akula resigned after the board of India's only listed microfinance company met in the financial capital Mumbai to discuss the terms under which he would leave and the firm's future direction. In a statement, Akula -- considered the father of Indian microfinance -- said: "I am confident that the current leadership of SKS is well-equipped to take it into the next phase of evolution." "When I founded SKS in 1997, my dream was to create a movement which would lead to financial inclusion of the poor," Akula said, ending weeks of speculation about his departure. "I am proud to look back with satisfaction at what we have achieved, ranging from helping to prove that poor women are credit-worthy to bringing microfinance into the mainstream of the national agenda." The earnings of SKS have been shrinking since October 2010 after the state government of Andhra Pradesh, the hub of the microfinance industry, accused lenders of exploiting poor borrowers with high interest rates and harsh debt collection tactics. Indian media reports on Wednesday said Akula was under pressure to quit due to differences of opinion on growth strategies to revive the fortunes of the loss-making company. Akula, an American, said he would remain committed to the microfinance sector at a policy level and would be involved in a mobile banking initiative, which he said would "create an improved platform" for low-cost lending. SKS, based in the southern city of Hyderabad, said that board member Puranam Hayagreeva Ravikumar would take over as the interim non-executive chairman. Independent director Tarun Khanna paid tribute to Akula, saying that he "brought global recognition for the microfinance sector in India". "We will miss Vikram but I am certain that SKS will continue to redefine the lives of tens of millions," added Khanna, an academic at Harvard Business School in the United States. The SKS board was considering changing its business model from a microfinance lender to a rural financial services firm selling such products as insurance and mortgages, the Economic Times and Mint financial dailies said. Earlier this month, SKS, which is based in the Andhra Pradesh capital, Hyderabad and operates in 19 Indian states, swung to a net loss of 3.84 billion rupees ($78 million) for the second quarter ended September 30. In the same period a year ago, it showed a net profit of 805 million rupees.