Muhammad Yunus is that rare thing: a bona fide visionary. His dream is the total eradication of poverty from the world. In 1983, against the advice of banking and government officials, Yunus established Grameen, a bank devoted to providing the poorest of Bangladesh with minuscule loans. Grameen Bank, based on the belief that credit is a basic human right, not the privilege of a fortunate few, now provides over 2.5 billion dollars of micro-loans to more than two million families in rural Bangladesh. Ninety-four percent of Yunus's clients are women, and repayment rates are near 100 percent. Around the world, micro-lending programs inspired by Grameen are blossoming, with more than three hundred programs established in the United States alone.
The Newsletter Published By Grameen Trust, Bangladesh. Click the Read More Butons to visit the archive of Grameen Dialogue.
What if you could harness the power of the free market to solve the problems of poverty, hunger, and inequality? To some, it sounds impossible. But Nobel Peace Prize winner Muhammad Yunus is doing exactly that. As founder of Grameen Bank, Yunus pioneered microcredit, the innovative banking program that provides poor people mainly women with small loans they use to launch businesses and lift their families out of poverty. In the past thirty years, microcredit has spread to every continent and benefited over 100 million families. But Yunus remained unsatisfied. Much more could be done, he believed, if the dynamics of capitalism could be applied to humanity's greatest challenges.
Now, in Creating a World Without Poverty, Yunus goes beyond microcredit to pioneer the idea of social business a completely new way to use the creative vibrancy of business to tackle social problems from poverty and pollution to inadequate health care and lack of education. This book describes how Yunus' in partnership with some of the world's most visionary business leaders has launched the world's first purposely designed social businesses. From collaborating with Danone to produce affordable, nutritious yogurt for malnourished children in Bangladesh to building eyecare hospitals that will save thousands of poor people from blindness, Creating a World Without Poverty offers a glimpse of the amazing future Yunus forecasts for a planet transformed by thousands of social businesses. Yunus's Next Big Idea offers a pioneering model for nothing less than a new, more humane form of capitalism.
By giving poor people the power to help themselves, Dr. Yunus has offered them something far more valuable than a plate of food security in its most fundamental form. - Former President Jimmy Carter
Muhammad Yunus is a practical visionary who has improvedÂ the lives of millions of people in his native Bangladesh and elsewhere in the world.-Los Angeles Times
[Yunus's] ideas have already had a great impact on the Third World, and...hearing his appeal for a poverty-free world from the source itself can be as stirring as that all-American myth of bootstrap success.- The Washington Post
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While free market capitalism is thriving globally almost unopposed now and bringing unprecedented prosperity to many, half of the world lives on two dollars a day or much less. Eradication of poverty remains the biggest challenge before the world. Colossal social problems and deprivations, mostly poverty-related and very unevenly distributed around the globe, continue to shame us everyday. Obviously the free market has failed much of the world. Many people assume that if free markets can't solve social problems governments can. After all, the government is supposed to represent the interests of society as a whole. But decades and even centuries of experience has shown that while government must do its part to help alleviate our worst problems, it alone can not solve them.Â
Fortunately for us there is a keen desire among many to lend a hand through charity for addressing the problems of poverty and other social problems. Charity is rooted in basic human concern for other humans. These days concern is usually expressed in the shape of non-profits and NGOs which may take various names and forms. Then there are aid organizations sponsored by rich governments' bilateral and multilateral. Nonprofits and aid organizations are trying to keep the problems within some control. But charity is a form of trickle-down economics; if the trickle stops, so does help for the needy. On the other hand multilaterals like World Bank focus only on growth as the means of helping the poor, but can not see that the poor people can be actors themselves. There are serious questions about the type of growth that can help the poor. As another response to the global social problems some businesses are identifying themselves with the movement for Corporate Social Responsibility (CSR), and are trying to do good to the people while conducting their business. But profit-making still remains their main goal, by definition. Though they like to talk about triple bottom lines of financial, social, and environmental benefits, ultimately only one bottom line calls the shot: financial profit.
I always believed that poverty can be totally conquered in our own lifetimes if the right approach is adopted. I based my belief on the inherent ability of the poor that can be unleashed once they are given the opportunity to help themselves. This I have proved in action through my three decades of experience with Grameen Bank. The concept of microcredit did not existed before I initiated Grameen Bank in Bangladesh, which basically recognized that credit without collateral is a fundamental right of the poor. Our success with this in my own country has been widely replicated all over the world including in some of the richest countries; and the Nobel Peace Prize 2006 for Grameen Bank and myself is one recognition of that success. The story of Grameen Bank has been told in my earlier book: 'Banker to the Poor'. In this new book I have described the further evolution of Grameen System. But more importantly I have introduced and elaborated here my broadened concept of social Business, that Grameen experience has led me into.
Grameen allowed the poor to be an actor in the free market and to enjoy some of its fruits to try to come out of poverty. It is fundamentally a business model, pure and simple, but a social Business. There can be other Social Business. They are just like any other business; but for social objectives and not for personal gain or dividend. I have tried to show in the book why Social Business can succeed in addressing social problems where other means mentioned above have failed. Social Business should not be confused with the term Social Enterprise which is used in a more encompassing sense and includes NGOs, personal initiatives, charities etc. and may include Social Business too.
Social Business introduces a totally revolutionary dimension to the free market economy. It does not interfere with the mechanism through which the normal Profit Making Business (PMB) works and prospers capitalization, expert business management, competitiveness etc. but investors here do not receive any dividend, though they can recover their investment if they want to, to reinvest in other Social Business or PMB. The satisfaction gained in achieving the social goals are the only motive behind the investment, and the business will be evaluated according to that standard. Essentially it is a non-loss, non-dividend business aimed at social objectives education, health, environment, whatever is needed to address the problems faced by society. The profits here remain with the business and help it to grow further. The whole thing is based on the premise that entrepreneurs need not be motivated only by the profits they personally receive, but can also be motivated by social goals and may enjoy success there with equal satisfaction. The important thing is not to mix up a Social Business with a PMB. In fact the inclusion of Social Businesses alongside PMBs in the business world will give the free market capitalism a larger, nobler and a more fulfilling purpose. Its advantages over straightforward charity are many efficiencies, continuous use with each turnover, competition with PMBs following the same rules, utilization of business innovations being some of the most important ones.
There can be two types of Social Business. Type one focuses on businesses dealing with social objectives only, as has just been mentioned. Type Two can take up any profitable business so long as it is owned by the poor and the disadvantaged, who can gain through receiving direct dividends or by some indirect benefits. There are various ways how the ownership can go to the poor. The two types can be mixed together in the same Social Business as has happened in the case of Grameen Bank. In a similar mixture of the two types, a socially beneficial rural toll road or bridge can be built by a company as a Social Business whose ownership will belong to the poor. On the other hand a huge project such as the Deep-Sea Mega Port in Bangladesh I have been advocating for, which will be used by several countries in the whole region and can potentially change the economic face of Bangladesh, can be built as a Social Business owned by the poor women of the country.
Is this an utopia? Will there be Social Businesses outside the realm of microcredit? Who will invest in such Social Businesses? I could answer these questions confidently in my new book, not only because I have faith in my idea and on the ability of the entrepreneurs to have social motives as well as profit making motives; but also because I am seeing this actually to happen at this very moment. I have devoted a good part of the book on the details of the first such Social Business we have started Grameen-Danone Company which went into operation in early 2007. The idea of the company was born over just a casual lunch I had with Franck Riboud, the Chairman and CEO of Groupe Danone, a large French corporation a world leader in diary products. It took just that time for me to convince him that an investment in a Social Business is a worthwhile thing for Danone shareholders. Even though it will not give any personal dividend to them, he agreed to the proposition even before I fully explained it to him. It took somewhat more time to fix up the modalities, the product (a fortified sweet yogurt for the poor malnourished children of Bangladesh at a price they can afford), the financing, tax and regulatory issues, new yard sticks for evaluating business and many other such details. And I have devoted many pages of the book on these details to show how all these things can be taken care of. The yogurt, Shokti Doi' (Energy Yogurt) is already in the market.
The Grameen System has invested in a second Social Business this time an Eye Hospital where the poor can have eye treatment and cataract operations at a very low cost and all others in the small town and the villages around will have an excellent medical facility where there was not any like that before.
Social Business is a new concept and its practice is just beginning. As my book reveals, it has to make a lot more exploration while gaining more experience. There are challenges to be faced and solutions to be developed. For example, we had to invent a totally innovative marketing system to keep the market fragmented so that the low cost 'Shokti Doi' is reserved only for the poor children and does not disappear in the urban market for the well to do. I have also touched upon other issues such as how can the ownership of the Type Two Social Business be transferred to the poor, or how can the wonderful opportunities offered by IT be best deployed for the Social Business.
One thing is very clear to me that with the Social Business taking off, the world of free market capitalism will never be the same again, and it then will really be able to deliver a deathblow on global poverty. I am sure, many business wizards and successful business personalities will apply their abilities to this new challenge the challenge of creating a poverty-free world within a short time. At the moment we are seeing merely the line of horizon. Soon a good part of business genius, creativity and innovation of the world will devote itself to this new goal of social good. A whole new stock market with its new indices will thrive in the financial capitals of the world motivated by this new incentive. It will accelerate the process of poverty eradication to an unthinkable pace using the same market mechanism which accelerated the global prosperity for the rich in the first place.
Welcome to the new world of Social Business.
25 December 2007
This third book by Professor Yunus, following Banker to the Poor and Creating a World Without Poverty, is dedicated solely towards the concept of social business, its implementation, and its maintenance. Social business is an innovative business model which promotes the idea of doing business in order to address a social problem, and not to maximize profit. As the title suggests, this complement to traditional capitalism truly can serve humanity's most pressing needs, especially poverty. Each and every social business creates employment, good working conditions, and of course, addresses a specific social ill such as lack of education, healthcare, and good nutrition.
In simple terms, a social business is a non-loss, non-dividend company dedicated entirely to achieve a social goal. In social business, the investor gets his investment money back over time, but never receives dividend beyond that amount. The Grameen Bank is a prime example of social business, with the Grameen borrowers themselves being its shareholders!
Building Social Business consists of case studies, anecdotes, and solid advice from Professor Yunus himself. This 'Social Business Manual' is a must read for anyone who wants to use his or her creativity to make a positive impact in their neighborhood, town, country, and world.
Order your copy today!