A Fistful of Rice: My Unexpected Quest to End Poverty Through Profitability
208 pages, Harvard Business Review Press, 2010
A Fistful of Rice by Vikram Akula is not a book. At a mere 208 pages, it is a fat pamphlet. The operative adage might be “don’t judge a book by its size,” because a book is better judged by the accomplishments of its author and the social enterprise he founded—in this case, SKS Microfinance. In 1998, after six months of lending, SKS, at the time a nongovernmental organization, had 165 borrowers. Today, the for-profit company serves nearly 6 million Indians with microloans.
For both author and reader, an autobiography is always fraught with danger. Typically, chapters brim with Twitter-like personal life details and self-analysis topped off by self-justifications. On the other hand, a good autobiographer teaches by example. For readers of these pages, an autobiography should proffer insights into social entrepreneurship, of which A Fistful of Rice contains a few:
- Don’t expect to go it alone. Borrow and synthesize ideas from others. My favorite example in the book is when SKS models its loan officer-training program on McDonald’s Hamburger University. Another is borrowing Coca-Cola’s product standardization as a model for designing microloans.
- Personal toughness matters. To attain his goal of a sufficient “level of discipline” and reliability to build trust among local villagers, Akula says he is forced to harden his heart. In his own words, “sometimes, being firm with destitute, even desperate, people felt cruel rather than strategic.”
- Learn by doing. The book is replete with examples of trial and error learning. Like every social entrepreneur, Akula is constantly testing and retesting ideas, processes, and procedures.
- Self-sacrifice is normative. In the heady world of policy and investment conferences, it is easy to forget the incredible tenacity and endurance demanded of a social entrepreneur in the developing world. In the early days of SKS, Akula and his two co-workers began every day at 7 a.m. and worked until 11 p.m. The living conditions were often less than basic.
- Personal courage and values count. At the very outset, local politicians and gangsters demanded bribes from Akula, and at one point they threatened him with death. Whatever refined Western values you hold dear, Akula’s memoir warns they will be tested in this field.
- Some management problems are never solved. In the case of SKS, peaceful coexistence with leftist rebels in SKS’s service areas remains an ongoing challenge.
The book opens with Akula’s moment of epiphany. He is in his 20s, a first-generation Indian American on a Fulbright Scholarship in a remote Indian hamlet talking with a solitary, desperately poor woman. “I looked closely at her,” he writes. “Life had beaten her down, but it hadn’t beaten the hope out of her. This, I thought, was exactly the kind of person we should be lending to.” But his aid organization was out of funds. Akula resolves “a new mission: to solve the problem of how to make microloans available on a mass scale.”
This kind of epiphany is nearly universal for social entrepreneurs, reinforcing that their work is less about money and profits, and always deeply personal. If you care about your work, the poverty reduction mission, and your community, then it hurts when colleagues let you down, your social enterprise stumbles, funding is denied, or other hurdles materialize.
The most poignant parts of A Fistful of Rice convey the author’s reverence for Muhammad Yunus, at whose Grameen Bank Akula studied. Fast-forward to the spring of 2010. SKS becomes the second microfinance institution to sell shares of the company to the public, prompting Yunus to make this derisive comment in Microfinance Focus: “The concern is that when you put an IPO, you are promising your investors that there is a lot of money to be made and this is a wrong message. Poor people should not be shown as an opportunity to make money out of.”
Akula takes great pains to argue the opposite case. Indeed, the point of the book is that private investment capital is allowing SKS to reach millions of needy microborrowers in an ethical way. He distances SKS from the lending policies and practices of the controversial Mexican microlender Banco Compartamos, noting: “There’s a big difference between charging the highest interest rate you think the market will bear, as Compartamos has done, and charging rates that allow for continued expansion without pushing the market to its limit. … We don’t believe in either the Grameen approach or the Compartamos approach.”
Because the SKS IPO postdates the book’s publication, the informed reader will want to investigate the facts to see if they square with the author’s views. A May 17, 2010, Microfinance Focus article details the complexity of SKS Microfinance’s growth, documenting that Akula developed a speculative social venture with available capital financing. To my knowledge, there are no extant charges that SKS Microfinance has exploited the poor on the road to profits.
To assail SKS’s financial backers for making a risky bet, and then for realizing financial returns from that very social investment, seems simplistic. Instead of criticizing the social investors, foundations, and donors who put their investment capital at risk in a socially responsible way, we should applaud them.
In the end, Akula reveals himself to be the quintessential entrepreneur: pragmatic, persistent, a bit pushy, and—as he himself admits—egotistically overconfident. This, it turns out, is a winning combination.
Jonathan C. Lewis founded MicroCredit Enterprises in 2005 and today serves as its chair on a pro bono basis. He is also the founder and CEO of the Opportunity Collaboration and a contributing blogger at The Huffington Post.