 "Vaya has sufficient capital for small bank licence: Vikram Akula")
Vikram Akula, founder and former chairperson of SKS Microfinance, has decided to buy 26 per cent stake in financial inclusion start-up Vaya Finserv, where he has also assumed the role of chairman. Akula, in an interview with Somasroy Chakraborty, shares the reasons for his return to the segment after three years. Edited excerpts:
What prompted you to re-enter the financial inclusion space?
I had a non-compete agreement with SKS that prevented me from entering this space for three years. That agreement got over in November. Financial inclusion is something very close to my heart. I always wanted to come back to financial inclusion once the non-compete period ended.
Three things stood out for me. Vaya has a great team, its managing director, Surya Kumar, was a colleague at SKS where he headed the technology division. The core team, of first 50 staff, is also from SKS. These are people with whom I have worked. I have seen their work and that gives me a lot of confidence. Second, Vaya’s mission to work in under-banked districts of India is in line with my own goal. Also, it uses next-generation technology platform, which is unique and will become the future of financial inclusion.
You have been appointed as the chairman. Will you play active role in day-to-day functioning?
No, I will be non-executive chairman. I will be like a mentor and my role will be more of strategic in nature. The team will be led by Surya Kumar.
Why did you acquire 26 per cent stake (in the start-up)? Can you offer some details on the pricing?
I wanted to have a meaningful stake in the company. I believe in this company and felt it should reflect in more than words. I am not in a position to comment on the pricing. All I can say is I will have 26 per cent stake. SKS Trusts owns 65 per cent stake. The remaining nine per cent is with employees and high net worth investors.
Will Vaya apply for a licence to set up small finance bank?
We are keen on creating a small finance bank. Vaya now works a business correspondent which facilitates savings and loans for self-help groups of women on behalf of banks. If we are fortunate to get a licence, we can offer the same services on our own. The only caveat is we are also interested in payments bank licence. As things stand, we are leaning more towards small finance bank.
Small finance banks will need to have minimum paid-up equity capital of Rs 100 crore. Will Vaya need to raise money to meet this criterion?
Vaya currently has sufficient capital to meet the regulatory requirement. In fact, I don’t think there is a need for the company to raise capital in the medium-term.
Do you plan to increase your stake in VAYA?
I guess it is possible but there is no immediate plan.
Can you share some details on VAYA's future plans?
VAYA opened its first branch in July, and now has 23 branches with 183 employees across six districts of eastern Maharashtra and northern Karnataka. For financial inclusion it is necessary to have a critical mass.
So, the company will expand its footprint to as many under-banked districts as possible over a period of time. Also, eventually our aspiration is to offer the full range of financial products and services including pension and insurance, not just savings and loan products.
What prompted you to re-enter the financial inclusion space?
I had a non-compete agreement with SKS that prevented me from entering this space for three years. That agreement got over in November. Financial inclusion is something very close to my heart. I always wanted to come back to financial inclusion once the non-compete period ended.
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What made you choose Vaya?
Three things stood out for me. Vaya has a great team, its managing director, Surya Kumar, was a colleague at SKS where he headed the technology division. The core team, of first 50 staff, is also from SKS. These are people with whom I have worked. I have seen their work and that gives me a lot of confidence. Second, Vaya’s mission to work in under-banked districts of India is in line with my own goal. Also, it uses next-generation technology platform, which is unique and will become the future of financial inclusion.
You have been appointed as the chairman. Will you play active role in day-to-day functioning?
No, I will be non-executive chairman. I will be like a mentor and my role will be more of strategic in nature. The team will be led by Surya Kumar.
Why did you acquire 26 per cent stake (in the start-up)? Can you offer some details on the pricing?
I wanted to have a meaningful stake in the company. I believe in this company and felt it should reflect in more than words. I am not in a position to comment on the pricing. All I can say is I will have 26 per cent stake. SKS Trusts owns 65 per cent stake. The remaining nine per cent is with employees and high net worth investors.
Will Vaya apply for a licence to set up small finance bank?
We are keen on creating a small finance bank. Vaya now works a business correspondent which facilitates savings and loans for self-help groups of women on behalf of banks. If we are fortunate to get a licence, we can offer the same services on our own. The only caveat is we are also interested in payments bank licence. As things stand, we are leaning more towards small finance bank.
Small finance banks will need to have minimum paid-up equity capital of Rs 100 crore. Will Vaya need to raise money to meet this criterion?
Vaya currently has sufficient capital to meet the regulatory requirement. In fact, I don’t think there is a need for the company to raise capital in the medium-term.
Do you plan to increase your stake in VAYA?
I guess it is possible but there is no immediate plan.
Can you share some details on VAYA's future plans?
VAYA opened its first branch in July, and now has 23 branches with 183 employees across six districts of eastern Maharashtra and northern Karnataka. For financial inclusion it is necessary to have a critical mass.
So, the company will expand its footprint to as many under-banked districts as possible over a period of time. Also, eventually our aspiration is to offer the full range of financial products and services including pension and insurance, not just savings and loan products.