Why you should CARE about microinsurance

We have written about microinsurance before, including SKS’s Vikram Akula’s decision to develop a product for his customers. Now, Bajaj-Allianz and CARE India will be developing a product of their own. In an interesting partnership between the charity and a commercial company, this venture will aim to help individuals substantially improve livelihoods through the safety net insurance can provide. On Allianz’s site there is a great interview with RN Mohanty, Chief Operating Officer, CARE India, speaking to this new partnership. Here is an excerpt:

The biggest challenge was definitely educating people that risk protection is an important part of their lives. We do this because we want to inculcate a culture of savings with the community, not just insuring for the time being. The general mindset in rural India is that unless you get something out of it immediately it is not worth investing. If you look at our client list, close to 90 percent are first-time insurers.

The rest of the interview can be read here.

Evolution of microfinance through lens of human resources

One of the most recognizable names in Indian microfinance has decided to step down from his role as CEO. Vikram Akula, the visionary founder and leader of SKS Microfinance will step down.

Mr. Akula says that this change will allow him to focus on a new initiative – microinsurance.  As MicroCapital reported earlier this year, SKS partnered with Bajaj Allianz Life Insurance Company to offer insurance products toclients.  This announcement comes amid rapid growth in the company. Suresh Gurumani, Director, Barclays Bank, will take over as SKS Microfinance’s CEO.  An official transition date was not given.  

This event marks a point of evolution for the microfinance industry at large as entrepreneurs are now looking to the next big financial product to develop for their contstituencies. As microfinance becomes increasingly commoditized and regulated, risk-takers like Akula are now pushing the envelope further to find other services that are in need. TC-I wishes Akuka the best in his new endeavor(s).

[Source: Microcapital.org]

SKS to insert ads in passbooks

The company has given its old black-and-white passbook a colourful facelift, using glossy paper, at once reaching out to its depositors and opening up a new revenue stream — through advertisements.

And with that simple modification, SKS Microfinance’s leader Vikram Akula has managed to address multiple problems at once. First the addition of color and gloss sends a strong signal that even the poorest people deserve high quality goods and services. And second, it provides an efficient means to have rural advertising. [Source: Sify.com]

Vikram Akula of SKS Microfinance Touts Mobile Banking as the Future of Microfinance

In a recent interview with IndiaKnowledge@Wharton, Vikram Akula of SKS Microfinance touted mobile banking (conventionally used for performing balance checks, account transactions, payments etc. via a mobile device such as a mobile phone) as the future of microfinance, but cited India’s regulatory environment as a significant limiting factor in expanding mobile banking networks (click here for a related article from our archives). According to Akula,

“It doesn’t make sense to try and build a retail brick-and-mortar infrastructure in rural India. From a cost perspective, it makes no sense at all. Mobile technology today is robust enough that you can actually very easily do banking. We actually have a very successful pilot that we’ve done.”

The prohibitive regulatory environment cited by Akula may soon change, as RBI “has begun to realise that the ‘rapid expansion of this mode of communication has thrown up a new delivery channel for banks.’” In order for the mobile banking market to fully realize its full potential, however, further incentives/mechanisms need to be put in place that stimulate, rather than stifle growth, especially since the mobile “banking” sector in India is currently “limited only to enquiries, alerts, and certain kinds of bill payments,” and has yet to become “transactional.”

To watch a video of the interview, which focuses on issues beyond mobile banking, including capacity building, capital infusion, cost defrayal, and the notion that microfinance institutions’ operational models should be akin to those of businesses, see below:

Vikram Akula, founder of SKS Microfinance, to speak at CGAP, Washington, DC today

The Consultative Group to Assist the Poor (CGAP) is hosting Vikram Akula, founder and CEO of microfinance institution SKS Microfinance today as part of their informal brown bag series. RSVP to cgap@worldbank.org, or call the CGAP offices at 202-473-9594 for more information. The CGAP offices are on the third floor of 900 19th Street NW, Washington DC.

Some background on SKS Microfinance and Vikram Akula follows:

Prior to launching SKS, Vikram Akula was a Fulbright Scholar in India, during which time he coordinated a government-funded (Jawahar Rozgar Yojana) action-research project on providing microfinance for food security. He holds an BA from Tufts, an MA from Yale and a PhD from the University of Chicago, where his dissertation focused on poverty alleviation strategies.

Since its launch in 1998, SKS Microfinance has provided over USD 550 million in loans, with loans of USD 223 million currently outstanding to 1,721,155 women members in poor regions of India. Borrowers take loans for a range of income-generating activities, including livestock, agriculture, trade, production and service businesses. SKS also offers interest-free loans for emergencies and life insurance to its members. Its nonprofit wing, SKS Foundation, runs an Ultra Poor Program. SKS currently has 700 microfinance branches in 15 states across India. In 2007, SKS Microfinance claimed nearly 170 percent growth and a 99 percent on-time repayment rate.

Wharton India Economic Forum (WIEF) – March 22, 2008

The 12th annual Wharton India Economic Forum is set to take place this upcoming Saturday, March 22nd in Philadelphia, PA.  The theme of this year’s conference is “Imagine,” with guest speakers ranging from Dr. APJ Abdul Kalam, former President of India, to Vikram Akula, CEO and Founder of SKS Microfinance.  Other speakers of interest include Shanta Devarajan, Chief Economist of the World Bank’s South Asia Region, and Indira Rajan, Chairperson and Managing Director of Minerva Group of Educational Institutions.  A description of this year’s theme follows:

Our conference theme this year is “Imagine” and it is in an originative and inspired mood that we wish to consider and examine what lies in store for India. We aspire to be a forum for discussing, not just India’s economic prospects in the world, but also how it can be a politically active and socially responsible power. It is essential, given the current state of world affairs that India be prepared to go beyond the ordinary and truly actualize itself as a country, in terms of its immense resources, human and material, as well as everything else it has at its disposal. Our aim, going forward, is to be thought leaders and foster a creative dialogue on how this might be possible, what indeed India is capable of and how it, as a country, can transcend expectations and realize its true place in the world.

Intrigued?  Visit the WIEF website.  To register for this conference, go here

Two leading social entrepreneurs seletected as 2008 WEF Young Global Leaders

On 11th March, the World Economic Forum announced the 2008 Young Global Leadership honorees. According to the WEF:

This honour is bestowed each year by the World Economic Forum to recognize and acknowledge the top 200-300 young leaders from around the world for their professional accomplishments, commitment to society and potential to contribute to shaping the future of the world

This year’s honorees from India include two leading Social Entrepreneurs, Vikram Akula and CV Madhukar. They share the honor with other prominent Indians from diverse fields. You can find the entire list here

Vikram Akula is the founder of SKS, widely considered as one of the fastest growing microfinance organizations in the world. C V Madhukar is the founder of PRS Legislative Research. The PRS website describes the organization as:

PRS Legislative Research is an independent research initiative that aims to strengthen the legislative debate by making it better informed, more transparent and participatory. PRS is the first initiative of its kind in India.

Clearly, Social Entrepreneurs both in India and around the world are increasingly getting recognized for their cutting edge work in help solving some of the worlds toughest problems.