A Fistful of Rice

A Fistful of Rice: My Unexpected Quest to End Poverty Through Profitability, by Vikram Akula, tells the story of Akula's for-profit microfinance organization, SKS Microfinance. Microfinancing has become increasingly popular over the past several years. The main idea revolves around small loans, which are distributed to (typically) women in poor countries. These women take the small loan and use it to establish a small business, a farm, or something like that. They then repay their loan with interest. This model has proven its effectiveness time and time again. People living in this state of poverty only need a small jump start financially in order to make a living.

Most agencies that do this operate as nonprofits. Akula argues, however, that higher profits allow for faster expansion and the ability to reach out to a greater number of struggling people. SKS Microfinance has enjoyed great levels of success and, at least by Akula's account, have engendered a greater level of trust in their members than the government of India. I should have mentioned earlier that as of now, SKS operates primarily in India, Akula's country of birth.

Akula's rise to the top has an interesting back story. Born in India, Akula's family moved to the United States to seize the opportunities open there for well-educated foreigners. There they grew to enjoy a comfortable lifestyle. However, during visits to his native country, Akula felt that he needed to do something for the poor. The poor in India are nothing like the poor in America, he realized, and have urgent yet simple needs. After graduating from college, he went on to work for a Microfinance institution only to discover the limitations that faced the nonprofit organization. People begged Akula for loans that he could not offer due to financial limits. This inspired Akula to start his own business.

Akula had a rough time getting SKS off the ground. Once it did, however, it grew exponentially. Before long, Akula found himself on the list of Time's 100 Most Influential People. He has been able to reach over 6 million people and more recently began providing cheap (and reliable) insurance as well as an Ultra-Poor program that provides basic needs (for free) to the most desperate and destitute of the poor in India.

All of this sounds great, and made for an easy and relatively fun read for someone not particularly interested in economics (it helps that I love India). However...

Just about a month ago, SKS hit some hard times. Critics have long bemoaned the high interest rates (28%) that SKS charges. Between that and reports of overly aggressive loan officers and a series of suicides of SKS members cause the stock to dive, investors to pull out, and Akula to step down as CEO. Oops.

So while I enjoyed reading this book, I'm hesitant to recommend it because, after all, it doesn't exactly have a happy ending.


Rating: 3.5 out of 5 stars

94/100