Wasn't it cruel for Maharaj to take all of Kashiram's money, even forcing him to borrow until he was destitute? What was the point of this financial ruin?

While it may seem harsh from an outside perspective, Maharaj's actions were intended to facilitate Kashiram's spiritual development, not to cause him ruin. According to Chapter 0, Kashiram had developed pride related to his ability to give Dakshina, and this pride was an obstacle on his spiritual path. Maharaj's constant demands for money, even to the point of making Kashiram borrow, were described as a 'Leela' or divine play specifically designed to remove this pride. The entire process was a lesson; as soon as Kashiram was convinced he did not have the power to give, his financial condition began to improve again.