Could you explain why Sai Baba started demanding so much money from Kashiram that he had to borrow to pay the Dakshina?

This was part of a divine play, or Leela, to help Kashiram's spiritual progress. According to Chapter 0, Kashiram was very eager for Maharaj to accept Dakshina from him and would feel hurt if Baba didn't take it. This feeling, however, allowed pride to creep in, making him think "I have the power to give." The text states that such pride is an obstacle to spiritual progress. To remove this obstacle, Maharaj started a "barrage of demanding Dakshina from him," forcing him to borrow money until he had none left. This difficult experience was designed to make Kashiram realize that he himself did not have the power to give, thus removing his pride.