In poverty-scarred Medhak, a micro-credit scheme replicates the Grameen Bank model
In 1990, Akula moved to Zaheerabad in Medhak district to work with Deccan Development Society, an ngo. "When you see the people suffer, make sacrifices, and when you experience the unstated intimacy of this suffering, only then do you realise the brute reality of poverty," he recollects. "I didn’t speak Telugu, nor did I understand village life. By the end of it I had picked up Telugu. Nothing was hidden from me."
Akula, who grew up in Schenectady, upstate New York (where father A.V. Krishna is a surgeon), encountered poverty first hand earlier while visiting relatives in Medhak. "It’s a tragedy that we nris, who can do a lot, are not doing enough. We have the skills to solve the problems," he says.
The year that Akula spent in Zaheerabad transformed him forever. For the past 12 years, he’s worked tirelessly to help the impoverished people of this Deccan region. Inspired by Mohammad Yunus’ micro-credit Grameen Bank in Bangladesh, he started the Swayam Krishi Sangam (SKS) in 1998 in Medhak district. He raised $52,000 from individual contributors in the US with, not surprisingly, 50 per cent of the money coming from nri doctors. "The idea is to put private sector initiative into alleviating poverty. I don’t want to depend on grants or government money."
Akula’s argument is simple: "The logic is that poor people need credit to survive. We provide small loans to poor people for income-generating activities. We undercut loan sharks at the doorstep with collateral-free loans." The minimum amount sks lends is Rs 1,000 and the maximum Rs 10,000. The interest rate is a flat 15 per cent, much less than the 60-100 per cent interest that moneylenders charge the villagers, leading to those vicious debt traps.
SKS supports 63 different activities divided into three categories: livestock, trading and agriculture. "About 40 per cent loans are for livestock, 20 goes to trading and about 15 per cent goes to agriculture in areas where villagers plough their own or leased land."
It has also adopted creative solutions to manage its growing operations which Akula explains as an "accident of my global travel". There are passbooks with smartcards and collection sheets with a personal digital assistant (PDA). The software connecting the PDA devices is the brainchild of Exim Software, Bangalore. Partially literate villagers with little prior exposure have turned fluent users of these hi-tech devices. sks now has four branches and village centres, 7,072 borrowers, $783,963 in disbursement and $428,778 in loan outstandings with $81 the average loan outstanding.
After returning to the US from his stint in Zaheerabad, Akula had joined the prestigious Harvard Divinity School but lasted only a semester. "I could not read ethics," he says. After picking up a master’s degree in agrarian and rural development from Yale, he returned to Medhak on a Fulbright scholarship. In the meantime, he also worked on an India government project to help develop an alternate distribution system. In ’96, he did his PhD at Chicago University where, predictably, his thesis was on local political empowerment. Theory and praxis, Akula has been able to bridge the divide—yet another face of globalisation. To find out more, contact Akula on e-mail at: vikram@sksindia.com