N obel Peace Prize winner Muhammad Yunus, known as
the “banker for the poor”, began transforming lives while an economics
professor at the University of Chittagong in Bangladesh. What began as
personal microloans to poor women in nearby villages grew into Grameen
Bank, which today has more than 2,500 branches throughout the country.
Grameen Bank has helped launch or expand the businesses of more than 8
million borrowers – 97 percent of them women. Yunus, a keynote speaker
at the 2012 RI Convention, recently spoke with Warren Kalbacker, a
frequent contributor to The Rotarian . Here is an excerpt of the interview. (click below to read)
TR: In 1976, you introduced the concept of microcredit, which
involves providing loans of as little as a few cents to individuals.
Many businesspeople might be puzzled as to how lending such small
amounts could be effective.
Yunus: Microcredit started in one village in Bangladesh. I
was teaching economics, and the country was going through famine. I was
frustrated because the economic theories I taught in the classroom
didn’t have any meaning in the lives of poor people. I thought I’d try
to do something to help individuals in the village next to the
university campus. I noticed loan sharking in the village – people
lending money to the poor with terrible conditions attached. The sharks
took control of peoples’ lives. I thought I could solve this problem by
lending money myself. I visited those who were borrowing from the loan
sharks, and I made a list of 42 names. The total money they owed was the
equivalent of US$27. I put the money in their hands to pay off the loan
sharks so they could be free. When I did that, everybody got excited.
If such a small amount of money could make so many people so happy, I
thought I should do more of it.
TR: Your concept of social business involves raising and
investing capital, then managing the enterprise for a return. Yet you
specify that there will be no profit-taking. Aren’t you offering
something like two cheers for capitalism?
Yunus: People think if you take out the profit incentive,
businesses cannot survive. That’s absolutely wrong. There are many other
incentives. In a social business, I make other people happy. By making
other people happy, I become happy. That incentive is something
economists don’t understand. I am introducing that. I’m not walking out
on capitalism; I insist that capitalism is misinterpreted. It’s based on
a single type of business: profit-making. It’s imbalanced. If you add
the social business leg to the capitalist system, then it becomes
stable. When a business is run only to maximize profit, people are too
busy to examine or solve social problems, so they let governments take
care of those problems. But we citizens are capable of solving problems
ourselves. That’s what the social business can do.
TR: Grameen has teamed up with France-based food giant Danone
to manufacture yogurt in Bangladesh. How does this venture differ from a
traditional profit-making enterprise?
Yunus: This social business is a non-loss, non-dividend
company designed to solve a social problem. If Grameen Danone Foods
makes a profit, the profit stays with the company. Its purpose is to
solve the problem of malnutrition among the children of Bangladesh. It
makes a special type of yogurt that is inexpensive to produce and
affordable to the poorest families. If a child eats it, he or she
gradually becomes a healthy child. The company is now in its fourth
year, and it’s doing very well. The nutritional impact is clear, and the
company is approaching the break-even point.
TR: You’re a tireless advocate for personal initiative across all cultures. What motivates you?
Yunus: Economists assume that entrepreneurs who can take the
risks and lead the way are limited in number – that these are the few
people in the world with exceptional qualities, who are capable of being
entrepreneurs, and the rest of the human beings are supposed to work
under them. This is unacceptable. I insist that all human beings are
entrepreneurs. No exceptions. No one lacks entrepreneurial capability.
But institutions have framed policies that don’t give us the opportunity
to discover our entrepreneurial ability. They’re being propagated
through our education system, which is built on the premise that you
work hard and get well paid, or you go to a good school and get a good
job – as if a job is the ultimate goal of a human life. I say that is
wrong.
TR: What will you focus on when you address this year’s RI Convention?
Yunus: I’ll be talking about the education system. All young
people should be taught that they have choices. They can be a job seeker
or a job giver. As they grow up, they can decide which they want to be.
Institutions must be built so that whichever path young people take,
they will be supported so they can pursue their goal in life. Right now,
this choice is missing in the education system.
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