Micro-Meltdown by Vikram Akula

Author:Vikram Akula [Akula, Vikram]
Language: eng
Format: epub
ISBN: 9781946885319
Publisher: BenBella Books, Inc.

CHAPTER 16

CULPRIT NUMBER THREE?

Was SKS also a culprit? Was I?

So far, I have talked about the issues in the industry: a slew of fly-by-night MFIs jumped into the sector and ran amok, and a new breed of banker-led MFIs cut short group training. These things led to tragic, unintended consequences.

But I have conveniently sidestepped any mention of SKS being at fault. In my mind, that just was not possible. SKS was above the rest. I had carefully cultivated the company for more than a decade before handing it over to new leadership. During that time, SKS had set the standard for best practices. We could not be at fault.

I was wrong. I came to realize how wrong I was almost by accident. In November 2010 MFIN, the industry association, hired an independent researcher, Davuluri Venkateswarlu, to determine whether the series of suicides had been the result of over-indebtedness of borrowers. We needed hard evidence to counter the Andhra Pradesh government. Davuluri’s report would come after the October Microfinance Ordinance had jolted the industry, of course, but the hope was that the central government, the Reserve Bank of India, or even the Supreme Court of India would step in. I had known Davuluri for years, ever since I had moved to India in 1990. An anthropologist trained at the University of Hyderabad, Davuluri had been conducting research in those years that exposed the abusive practices of using child labor to pick cotton. He was a solid academic with an impeccable reputation. We had an easy familiarity and respect for one another.

On a Thursday afternoon in January 2011, I received a phone call from Davuluri. “I need to meet with you privately, before I present my report to MFIN,” he told me. “You need to hear the audiotapes we have of these borrowers.”

Why did he want to meet with me privately, in advance? I thought to myself. Did he want to ask me for a bribe to alter his findings, in the same way that the local-language media had been trying to get payments from me in exchange for not running trumped-up stories of suicides? It was a paranoid thought, I know. But at that time, I felt like I could not trust anyone outside of my colleagues at SKS. Nonetheless, I gave Davuluri the benefit of the doubt and agreed to meet with him.

We met a few days later, at the SKS office in Hyderabad. He came with two researchers. January is the cool season in Hyderabad, its weather like a perfect New England summer day, and I had spent that Sunday morning as I often did, enjoying time with my son. After we had lunch, I walked into our six-floor office building. My back-corner office was next to our stately boardroom, and it was in the boardroom where I sat with Davuluri. Our CEO, Rao, and my key aide, Sivani Shankar, joined us.

Davuluri is a lean, weathered academic with a slightly sunken face whose upper lip is brushed with a thin mustache, a common trait among Indian men.

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