The founder of SKS Microfinance said Monday that the biggest critic of his former firm's switch to for-profit status had a point about the fallout from microlending's transition from philanthropic antipoverty tool to commercial business, writes The New York Times.
Vikram Akula, who left the Indian firm in November, told a Harvard University conference on social enterprise that "Professor Yunus was right," a reference to economist and Grameen Bank founder Muhammad Yunus.
The nonprofit Grameen pioneered the use of tiny loans to help entrepreneurs in the developing world build small businesses. Mr. Yunus has written and spoken harshly of commercial microlenders he said are exploiting the poor for profit rather than aiding them.
In a statement, organizers of the Harvard conference said Mr. Akula told participants he "had not fully anticipated the potential downside of accessing the public market for social enterprise."
SKS and other microcredit firms have become embroiled in controversy over a rash of suicides among heavily indebted borrowers in India's Andhra Pradesh state, which local officials blame on heavy-handed collection tactics by the companies.