“We are all Entrepreneurs”: Muhammad Yunus on changing the world, one microloan at
a time.
Introduction
Muhammad Yunus, the Bangladeshi
economist, micro financing pioneer and
founder of the grassroots Grameen
Bank, has not been resting on his laurels
since winning the Nobel peace prize in
2006. For one thing, he has expanded his
concept to developed countries via
Yunus Social Business, founded in
2011. “Globally, the issues are the same,” he says. “In terms
of poverty, of welfare recipients, of housing problems, water
problems, in terms of healthcare problems. These are
common problems, rich country or poor country. In the past
year, he has begun establishing Yunus Social Business
Centres at universities around the world, including at
Australia’s University of New South Wales and Latrobe
University. Two centres are slated to open in New Zealand
this year.
“Young people have to know
about it,” he says. “They should
learn that there are two kinds of
businesses in the world. One is a business which makes
money, and the other solves the problems of the world. It’s
an academic exercise and what they do with that in real life
will depend on them, what kind of life they would like to
choose.”
The idea behind his multi award-winning idea of microcredit
is that everyone is a natural entrepreneur. His radical idea,
established in poverty-stricken Bangladesh in the 1970s, was
that if poor people were given a proper start and
encouragement, their natural entrepreneurship would
flourish. “There are roughly 160 million people all over the
world in microcredit, mostly women. And they have proven
one very important thing: that we are all entrepreneurs.
Illiterate rural women in the villages, in the mountains, take
tiny little loans – $30, $40 – and they turn themselves into
successful entrepreneurs.”
In the mid-70s, as a young economics professor, Yunus
experimented with lending a mere $27 to 42 women in the
village of Jobra near his university in Chittagong. Banks
would not lend to the poor, fearing default, and
moneylenders charged extortionate rates. His experiment
was a success, and he began to develop the idea, in practice
as well as in theory, eventually establishing the Grameen
Bank.
Grameen Bank - Today
Grameen Bank today has nine million borrowers, 97% of
them women. “They own the bank. It is a bank owned by
poor women,” he says. “The repayment rate is 99.6%, and it
has never fallen below that in our eight years of experience.”
Part of his expansion into rich countries includes a program
in the US: 19 branches in 11 cities, including eight in New
York. “We have nearly 100,000 borrowers there now and
100% women. Not a single man.”
Globalization and the technological revolution may make
Yunus’s theory timelier than even he expected when he
began. Globalization has sent manufacturing from rich
countries to poor, and robots will eventually kill many of
those jobs too as corporations seek to minimize costs and
maximize profits. In rich countries, jobs are more precarious,
people no longer expect the security of a job for life, and
welfare is rapidly being reduced by the vogue for austerity
economics.
Fostering entrepreneurship is the solution, Yunus says. And
his concept of social business – created for pro-social goals,
not profit – is the solution to social and environmental
problems caused by intense capitalist competition. Some
pioneering companies are already embracing it. Their
reasons – genuine benevolence, good publicity, “green
washing” – hardly matters, he says.
DANONE, the French dairy company, was one of the first,
agreeing to form Danone Grameen in 2007 to produce
fortified yoghurt for malnourished children in Bangladesh.
The water company Veolia made a similar joint venture to
provide safe drinking water in Bangladeshi villages, while
the American food company, McCain, has a joint venture
with Grameen helping farmers in Colombia raise crop
yields. India is preparing to launch an “action tank” as Yunus
calls it – a group of businesses that collaborate to create
social enterprises on the side.
The bulk of the investment in these partnerships comes from
the company, which expects no profit: it only takes back the
amount of their investment over a period of time. “We just
participate in a token way,” Yunus says. “A thousand euros
or something like that, but we allow the name to be attached
to the company to show that this is a genuine social
business.”
Yunus maintains that people working in these sorts of
businesses get a feel-good reward on top of their salaries.
“Even shareholders start enjoying it,” he adds. “They don’t
mind earning a little less if it is helping the children of the
country, or poor people, or single mothers. They are proud
that their company is taking care of that.”
(Accessed from: https://www.theguardian.com/sustainable-
business/2017/mar/29/we-are-all-entrepreneurs-
muhammad-yunus-on-changing-the-world-one-microloan-
at-a-time)