Professor Muhammad Yunus, founder and managing director of Grameen Bank, has been a great inspiration to the entire microfinance community. Microfinance Focus congratulates Dr Yunus and takes the opportunity to republish an exclusive interview that Dr. Yunus had given to it on March 30 on the sidelines of the Sa-Dhan's National Microfinance Conference 2009 in New Delhi. It is a show piece of Dr yunus's views on microfinance that will have an enduring impact on the community forever:
MF FOCUS: Microfinance is an established and recognized instrument to fight poverty today. Many people are confident and hope that poverty can be eliminated through it. Isn't it too simple just to rely on microfinance?
Dr. Yunus: You don't have to. Nobody is forcing you to do that. If somebody wants to do Microcredit, fine. I wouldn't say this is something everybody should have. Nobody says it is the only solution. Human beings are very multi-dimensional. Microfinance is one of the many, many things.
MF FOCUS: Social business is an additional way. Do you identify enough potential for social business to make a real difference, globally?
Dr. Yunus: Yes of course. Definitely it is a global and not a local issue. There are two kinds of businesses: One is business to make money, the other business is to change the world. This one is with the intention of changing the world and not to have any personal gain from that. It is all dedicated to make a difference. It is addressing a social issue, to resolve it. You can do that.
MF FOCUS: What are the factors that make social businesses successful?
Dr. Yunus: A good business plan, good ideas and use the creativity in the most creative way.
MF FOCUS: Microfinance as well as Social businesses have to be highly efficient. How is it possible to maintain or re-introduce the social mission back into microfinance?
Dr. Yunus: Whenever something gets popular, actually catches attention, there are people who take advantage of that and misuse it. It happens in everything. When Big brands are popular, it gets imitated by fake ones. Same thing happens with microcredit. People name it microcredit but in fact it is not microcredit. It is something completely different.
People have to be made aware of what is microcredit and why it is important to stick to the real microcredit and not the one which has a different motivation. But while you are looking at the microcredit itself, even good people may have wrong ideas, which makes them shift away from the whole idea, the mission. We have to be very careful and remind ourselves, what is our mission. That is why we have meetings (Sa-dhan conference) like this, to rediscover your mission and then re-adjust your work to the mission.
MF FOCUS: To build an enabling environment for social entrepreneurs, what should governments do and what regulations do you
count as important?
Dr. Yunus: It is very important. Very Important! Regulation is very important but at the same time regulation can be stifling, destroy the whole business by over-regulating and making it impossible to function. It is like a mother and a child. You know how you have to change your child to do the right things. At the same time you should not control your children so that it loses all its initative. It is like becoming a prisoner in the hands of the mother. Regulation should be promotional, a Cheerleader. At the same time make sure you do the right thing, that you don't drift away from the real principles. It is a tough job in the sense you have to balance both how to encourage, and at the same time how to restrain.
MF FOCUS: Due to the financial and economic crisis, development funds were cut by the North (developed countries). Where do you see the responsibilty of rich countries in fighting poverty? Where should they act?
Dr. Yunus: See the Southern countries didn't create the crisis, they are the victims of the crisis.It is only one country which created the crisis and it has spread all over. Those who were involved in creating this crisis also have a moral responsibility to make sure that the victims are supported . There are lot of people sufferring, that has to be taken care of. Now they are busy of making bailout packages and all the support. And i am saying At least 10 % of all bailout packages every where should be earmarkerd for victims in the Third World. These things have to be built in the system.
MF FOCUS: Apart from poverty there are many topics, which can be solved or bargained only at an international level, Climate
Change for example. Nicholas Stern is convinced, we have to solve both topics together: Poverty and Climate Change.
Dr. Yunus: Well, financial crisis is the latest crisis. 2008 had the food crisis, which is still there. Simply front pages have been taken over by financial crisis and have pushed away all discussion about the food crisis. 2008 was also the year of energy crisis - the oil prices shot up to the sky. It didn't disappear, it is lying low for a while. And also this is perpetuating environmental crisis. All these crises have their roots in the same thing.
These are not separate crises. You have to adjust the root causes than adjusting all of them. The root causes are the wrong structure, the capitalism structure that we have. We have to redesign the structure we are operating in, which is wrong and unsustainable lifestyle. We have to take the hard decision! We and each one of us must take a decision on this planet. And also we should inculcate among our children a simple way of living. We should not live in a way, that it harms another person. Once you take this decision, everything will be solved. We have no right to live a life which is harming anybody else. It is like traffic laws. You can't have a car and knock everybody off the road. There's a rule that you have to drive safely, so that you don't harm anybody. Same thing is for living on this planet. We are sharing with each other.
MF FOCUS: Grameen Bank has moved to Grameen II methodology, but still Grameen replicators in India follow the Grameen I model. Do you think they should explore such flexible methodology?
Dr. Yunus: It is up to them, what they like I cannot advise. We thought we can solve some of the problems. we see the opportunity that we have by relaxing our procedures and rules to make it more friendly.
MF FOCUS: What is the next level for Micro finance and how to take it forward?
Dr. Yunus: Next level is to enter into insurance, pension funds, second generation issues young children are coming up and we should try to make them into better citizens to deal with life.
MF FOCUS: Savings product is much needed by the poor. Regulation is cautious not to allow collection of savings by certain categories of MFIs. What is your opinion?
Dr. Yunus: Savings product is very important. Change the law!!! Keep on insisting that the system is right.
MF FOCUS: With Microfinance Focus, the monthly magazine, we are working on information exchange and trying to promote best
practices in the sector. How important are projects like Microfinance Focusfor the sector?
Dr. Yunus: Yeah! This is a good initiative. Communicate I mean let people know what is happening, what is right, what is wrong, so they can participate in debate, discuss, make it more efficient, more cost effective and more friendly.