Both reports said SKS employees had verbally harassed over-indebted borrowers, forced them to pawn valuable items, incited other borrowers to humiliate them and orchestrated sit-ins outside their homes to publicly shame them. In some cases, the SKS staff physically harassed defaulters, according to the report commissioned by the company. Only in death would the debts be forgiven.

The videos and reports tell stark stories:

One woman drank pesticide and died a day after an SKS loan agent told her to prostitute her daughters to pay off her debt. She had been given 150,000 rupees ($3,000) in loans but only made 600 rupees ($12) a week.

Another SKS debt collector told a delinquent borrower to drown herself in a pond if she wanted her loan waived. The next day, she did. She left behind four children.

One agent blocked a woman from bringing her young son, weak with diarrhea, to the hospital, demanding payment first. Other borrowers, who could not get any new loans until she paid, told her that if she wanted to die, they would bring her pesticide. An SKS staff member was there when she drank the poison. She survived.

An 18-year-old girl, pressured until she handed over 150 rupees ($3) — meant for a school examination fee — also drank pesticide. She left a suicide note: "Work hard and earn money. Do not take loans."

In all these cases, the report commissioned by SKS concluded that the company's staff was either directly or indirectly responsible.

The deaths came after a period of hypergrowth leading up to the company's hugely successful August 2010 initial public offering.

Originally developed as a nonprofit effort to lift society's most downtrodden, microfinance has increasingly become a for-profit enterprise that serves investors as well as the poor. As India's market leader, SKS has pioneered a business model that many others hoped to emulate.

...

A profound shift in values and incentives at SKS began in 2008.

In October, Boston-based Sandstone Capital, now SKS' largest investor, made a major investment. It joined U.S. private equity firm Sequoia Capital, which funded Google and Apple and is SKS' largest shareholder, on the board of directors.

Akula, who had been chief executive in the company's early days, stepped down in December 2008 but stayed on as chairman. The company brought in new top executives from the worlds of finance and insurance.

SKS also began transferring more loans off its books, selling highly rated pools of loans to banks, which then assumed most of the associated risk of borrower default. That freed SKS to push out more and bigger loans.

In December 2009, SKS launched a massive sales drive. The "Incentives Galore" program ran through February 2010 — just one month before the company filed its IPO prospectus.

Agents won prizes worth up to 10 times their average monthly salary for signing huge numbers of new borrowers. Vautrey said he coordinated the shipment of 8,800 televisions, refrigerators, gold coins, mixers, washing machines and DVDs as rewards for more than 3,000 districts nationwide.

One loan officer signed up 273 groups in a month. Under training protocols, the ideal number of groups formed per month is 12, the maximum is 36, according to field agents and reports written by Akula.

"The focus is only on targets," Ramulu Sirgapur, who spent a decade at SKS before he left in December, told AP. "Even if we've given feedback, there might be recovery or repayment issues. That's OK. Just concentrate on growth."

The result: Management had a great set of numbers to show investors as it shopped the IPO. In a month, SKS could add 400,000 borrowers and 100 branches, and train more than 1,000 new loan officers. SKS had 6.8 million borrowers and had disbursed $3.2 billion in loans. India was pimpled with SKS branches, which bloomed in nearly 100,000 villages.

SKS said it was the fastest growing microfinance company in the world.

But basic principles of lending were overlooked, according to interviews with current and former employees, as well as correspondence and internal PowerPoint presentations by Akula.

Had to. First one that popped up when I went looking for a new loan in countries I hadn't lent to yet.

https://www.kiva.org/lend/1013531

My Kiva loan to a business in Georgia took forever to pay back, but I'm finally able to loan my $25 again. It's going to a shea butter biz in Ghana.

My 10th loan on the same $25 bucks. I think it started as $50 but Kiva fees cut it in half.

You can change the fee donation to 0.

The Ghana shea nut picker I gave a loan to last year hasn't paid back a cent yet. Hope that's not the end of my original 25$ I've been re-lending over the years.