Book Review – A fistful of rice

I guess this blog  should just focus on books instead of research papers which take you no where.

Just stumbled upon this book which is story of Vikram Akula, founder of SKS Finance. SKS Finance as we know jumped from nowhere to dizzy heights only to crash.

This book fistful of rice is quite an inspiring tale (even if we believe 50% is truth) of how a person really tries to bring abouct a change in India. And that too someone who did not have to given he was fairly well-settled in US. It is interesting how his father migrated from Andhra to US to escape from poverty and how his son just about ended up doing the reverse. Of course, his parents were not amused with his decision to move to India to work on addressing poverty.

How two events impressed on his childhood which made him determined to come to India and look at poverty. One was related to how a poor woman picks up each grain of rice spilled on the floor and other of two poor boys eating from leftover plates. Most of us living in India, do come across related incidents in our lives but how many really turn this into a passion to address poverty is quite an Akula story.

The book has many interesting anecdotes on how this American Indian struggled to work towards his dream. It is quite inspirting in many ways given the number of hindrances he had and how he still stuck on. The particular one when locals tried to enter the place where he was sleeping along with a colleague (a person just about to join) is quite a tale of bravado. Then how he refuses to pay a single paise of bribe (impressed by Mahtama Gandhi) but agreeing to delay his venture is some patience. In another interesting twist of tale, despite SKS doing well he had to quit as a CEO as his own finances were in bad shape. As a result he had to go back to US and work for ckinsey just to sort things out. And then he came back again to join SKS.

The chapter on goat economics is a useful way to understand how poor are able to pay microfinance loans that have high interest rates. Akula explains how poor but goats with the loan. Goat it seems is a pretty low maintenance animal. It eats a few things here and there. The goat then gives kids (2 kids per year) which can be sold generating a 100% return in year 1 itself. Akula also explains other reasons why microeneterprises generate high returns:

  • Employ family members
  • Informal enterprises – so costs of registration etc not there
  • Low infrastructure costs
  • For above three, capital represents a small fraction of overall input costs.

Simplified but useful..

I also liked the way in which he along with a team mate used rangoli to explain how microloans work.

He ends the book showing how a poor woman which runs a shop due to help from SKS showed a new asset – colored TV to Akula. Apparently, the TV was gifted by the woman’s son who also worked at SKS! He explains, they ensure there are no conflict of interest and the son could not have given the loan to her mother. So all in all, he was pretty satisfied.

The book is an amazing light read but quite a few lessons on the way.

Ignoring SKS’s recent troubles, the book makes a good read.  Though, would like to read part-II of the book from Akula on what went so wrong with SKS.

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