[6] In 1997, inspired by Grameen Bank, Vikram Akula founded Swayam Krishi Sangham (SKS Society) as a non-profit organization.
[7][8] However, unlike Grameen bank, SKS used an aggressive commission based system to encourage loans, thus forming a network of loan marketers who were not direct employees of SKS, but worked on a commission basis in smaller villages of Andhra Pradesh.
In order to capitalize the new business, Akula established the SKS Mutual Benefit Trusts (MBTs), which fundraised among women from Andhra Pradesh villages.
[12] On 28 July 2010, SKS Microfinance debuted on the Bombay Stock Exchange with an IPO that was oversubscribed 14 times.
[citation needed] In a 2012 cover story, The Hindu[8] reported that a marked shift took place in the values and incentives of SKS in 2008, after large scale investment began to flow in from venture capitalists and prospectors including Boston-based Sandstone Capital and Sequoia Capital.
[citation needed] An independent investigation commissioned by the company linked SKS employees to at least seven suicides of creditors in Andhra Pradesh.
[26] The company lists some of the social benefits of its financial product and service offerings as "providing self-employed women financial assistance to support their business with enterprises, such as raising livestock, running local retail shops called kirana stores, providing tailoring and other assorted trade and services.
[27] Through group lending, situations of adverse selection and moral hazard due to asymmetric information are better managed.
The concept of honour and respect within society is deeply rooted in Indian culture and willful default invites condescending glances, humiliation and even ostracism.