It is this pragmatism that has made him India’s most successful micro-financer. On Monday, he was honoured as ‘Social Entrepreneur of the Year 2006 in India’. The Schwab Foundation and the Nand & Jeet Khemka Foundation collaborated with the Confederation of Indian Industries and UNDP to select the awardee.

Akula finds the idea of 2-3 acre farms going into capital-intensive crops like cotton risky. His total agriculture lending is just 6% with SKS focusing on non-farm activity. “There has to be a regular cash flow for microfinance to succeed,’’ he says. He lends to women’s groups sums as little as Rs 1,000 for starting a shop, rearing livestock and starting a small enterprise like bicycle repair.

His profits will put best corporations to shame — SKS was the fastest growing microfinance institution from 1998 to 2004 with 300% growth rate. SKS has lent over 3.2 billion rupees in income-generating loans and has benefited approximately 1.5 million individuals. Their loan members improve their economic well-being by 11% yearly.

Though he has operations in Bihar and Punjab, he believes southern India lends itself better to microfinance — there is more non-farm activity there. “There was a recent study that dhobis, tailors and barbers contribute more to Andhra’s GDP than IT,’’ he says pointing to the untapped credit market in India.

He gives loan at close to 24% and delivered on mopeds at borrowers’ homes. “They come to us even at this interest as this works out less than what they have to pay in bribes or on transport to access other loans,’’ he explains.

Akula’s story has become legendary ever since he was nominated among the “100 people who shape our world”. Born in Hyderabad, he grew up in the US. He returned after his college education and began working with an NGO dealing with microfinance. Soon he realised that microfinance could be an important tool to eradicate poverty. But “the microfinance they were doing was incredibly inefficient,” he says.

He, then, enrolled in a PhD programme on microfinance in University of Chicago.

Akula had to raise $52,000 from more than 300 friends and family members to start his first lending operation in 1998. Today, financial giants such as Citigroup Inc., ABN Amro Holding and HSBC Holdings Plc have already provided millions of dollars for SKS to lend out.