Grameen Bank Founder Yunus: "Everyone of world's 8 billion people is an entrepreneur”.

• Miscellaneous
• 25th April 2024
• YC

Interview With The Nikkei Business, Tokyo.

Published on 25th March, 2024 

( The Nikkei Business is the leading business weekly of Japan. It is an employee-owned company.)

---------------------------------------------------------------------------

English Translatin PDF | Japanese PDF

Grameen Bank Founder Yunus: "Everyone of world's 8 billion peopleis an entrepreneur”.

Interviewed by Takayuki Isogai, Editor-in-Chief   

Yunus founded Grameen Bank in Bangladesh, which has made great achievements in poverty alleviation through micro-lending. Every human being is an entrepreneur. Through his support for the poor, he realized the creative power hidden in human beings. He has proposed the concept of "social business" to solve social issues.

PROFILE

Muhammad Yunus 

Muhammad Yunus was born in Chittagong, Bangladesh in 1940, under British rule. He did Ph.D. in Economics from Vanderbilt University. In mid-1972, he returned to Bangladesh and became Head of the Department of Economics at the University of Chittagong. In 1983, he founded Grameen Bank, which helped the poor, especially women become self-reliant through microcredit. [Photo: The Nikkei Business]

 In 2006, he and Grameen Bank were awarded the Nobel Peace Prize. He is one of the proponents of the United Nations Sustainable Development Goals (SDGs), an Advisor of the UN Zero Waste Advisory Board, and is still active in his 80s.

The world is becoming increasingly divided with Russia's invasion of Ukraine, the U.S.-China conflict, and the Gaza crisis. Why is this?

What I have attempted to do is to show that our current economic system is designed in the wrong way. This is my basic position. The current economic framework does not help the world come together. It is very divisive. It is working in the direction of conflict instead of bringing people together.

The design of our economic framework is flawed. The civilization we have built to date is based on the accumulation of wealth. We want to have more and more, and that is the basis of the current civilization.

And tensions arise with others when they try to get more. This leads to conflict and sometimes to war. The uneven distribution and concentration of wealth that we are seeing today is the result of everyone acting to get more than others.
The system is designed in such a way that if you accumulate more wealth, you will have more power. Concentration of power is the worst part of this mis-designed economic system.

The entire economic system needs to be transformed.

Are you saying that the current economic system is causing a concentration of wealth and dividing the world?

Yes, I am. Wealth is power. This is plain and simple. With economic power comes political power, media power, and the ability to manipulate the political and social system at will.

This concentration of wealth and power is closely related to globalization. Wealth-accumulating activities are expanding beyond national borders. As more wealth and power become available, the degree of concentration is increasing. Eventually, a handful of people will monopolize the wealth of the world. Continuous concentration of wealth  is rooted in the economic system. The entire system needs to be transformed and redesigned.

Photo: The Nikkei Business

In what form will you redesign?

The new economy will be an economy of sharing. The current civilization is moving in the direction of concentrating wealth, but the new civilization I advocate is moving in the direction of sharing wealth.

The current economic system exacerbates environmental and unemployment problems and accelerates the concentration of wealth. We aim to reverse this trend and create a world that achieves the three zeros: zero poverty, zero unemployment, and zero net carbon emissions. The new economic system will be based on sharing, caring, and helping each other.

Where do you start in redesigning the economic system?

I started my practice by providing banking services to poor women in Bangladesh. I aimed to help these women overcome the poverty they faced by helping them set up small businesses through small loans.

This approach, which I called "microcredit," became very popular. It was a small initiative at first, but it gradually grew, and seeing how it was helping people gave us confidence that we were on the right track. We were small, but we were taking on a big challenge. A challenge to the entire banking system. It is always my contention that the banking  system is wrong in its very design.

The banking system is designed to give more money to those who already have more money. It does not lend money to those who do not have it. I have argued that this should be reversed.

Banks should start by lending money to those who don't have it and gradually expand their lending sources to those who do have money. This was the starting point for the redesigning of the economic system that we are working on.
The current system ignores the masses. More money is poured on the few people who already have more money. As a result the rich are getting richer.

You insist that humans beings are creative creatures. Through the activities of Grameen Bank, you  changed the nature of finance to suit human beings as a whole.

Initially, most of the Bangladeshi women we financed had never been to school and had not had the opportunity to receive an education. But still, when they received $5 or $10, they started their own businesses. They never complained that they did not know how to start a business, and as long as they could get a loan, they created their businesses.

It was said that the solution to the poverty problem was to create jobs, but these women never said, "Please give me a job". Instead, they always asked for money. This is when I realized that they were not looking for work. They were not job seekers looking for work, but entrepreneurs. And this is the true nature of human beings.

Humans are born as independent individuals. Humans are creative creatures. However, when we get a job, we give up our creativity. This is because a job is not something where you can decide for yourself, but something your boss tells you to do. If you deviate even slightly from the job your boss has set for you, he will tell you "you are fired". Work is a form of slavery, where you surrender yourself to your employer.

You insist  that every person is an entrepreneur.

Yes, I do. Job cannot be the fate of human beings. Human beings are born with limitless future. Finance is the key to everything. Finance is like oxygen if you want to develop entrepreneurship. Unfortunately, however, this oxygen is not reaching half the world. Currently, only a handful of  entrepreneurs are funded, but there are 8 billion entrepreneurs in the world.

Profit maximization in business is an option. Not only path. We  need to rethink what we call shareholder capitalism, a management style that emphasizes profit only.

Yunus works to promote and advance the Sustainable Development Goals (SDGs) 

(Photo=NurPhoto/Getty Images)

The purpose of business activity is to maximize profits. When a company makes a profit, it can invest more, the business expands, and the economy grows. This will provide people with jobs, pay more salaries, and keep the population growing.

This is the standard explanation for the capitalist system. However, as we have pointed out, the process has caused an intense concentration of wealth.

The world's wealth is in the hands of a few people and the rest of the people are left out. And we are discussing solutions to individual issues such as poverty and unemployment etc. But it is meaningless if we do not solve the causes at the root. We need to find business objectives other than only maximizing profits. 

Another option?

The purpose of business is supposed to be profit maximization because economics defines human being as a selfish being. However, this is totally wrong. Human beings can be both selfish and selfless. By introducing a new kind of business that is not about making money, we can solve all social, environmental, and economic problems. This can achieved through social business.

Obviously, some will immediately say that it is impossible. Is it? I would choose social  business over money making for myself. My interest is in solving problems and I don't want to see people suffering in poverty. It is up to each of us to decide which do we prefer. It is not something to be dismissed out of hand.

Social business is a business, not a charity. It invests money to create a service or a product and then sells it to recoup its investment and may or may not create surplus. It differs from conventional business in that it aims to solve social problems, not to maximize personal profits.

You argue that government subsidy  is not the way  solve problem of poverty, best way to do it is through  solely through the power of social business.

Government guarantees and subsidies for livelihood no longer work in any country. Government subsidies are like government telling the recipients that "We will give you money, you don't have to do anything". How can you get paid for doing nothing? This is a denial of human creativity. We cannot just close the door in front of people to make a living,  and give them money to feed themselves. Any logic will say this cannot be a human-friendly policy.

Japan should take a step toward unleashing creativity. The economy has been stagnant in Japan for 30 years. How can we get out of it?

I am sorry, I have not been following closely on what is happening in Japan, but if growth has stopped for 30 years, it is probably because society is missing something. People are stuck because capitalism gives you no choice but to make money. Domestic market is not growing because of aging population, while external trade cannot fill the gap.

The old ways of steering  the economy on a growth path are reaching their limits. Social business can be a big breakthrough to create an expanding  space for the economy to grow.  Japan can redirect its endless creative ideas from personal profit maximization to solving domestic as well as massive global social, economic, and environmental problems. Advantage of social business is that the profit of the businesses are ploughed back into social businesses. There is no leakage into consumption. It adds to the capacity building of the economy. Japan can be the leading problem solver of the world. 

Great achievements in supporting women's activities

Yunus speaks with women in Bangladesh (Photo=Karen Kasmauski/Getty Images)

The efforts of Grameen Bank, which received the Nobel Peace Prize began when Yunus lent pocket money to women in poverty-stricken rural areas.

In 1974, Bangladesh was still recovering from the devastation of the war of independence and was facing a severe famine. Yunus, who was teaching economics at a university, went to a farming village to see for himself the extent of the damage, and took on the debt of a woman who was being harassed by loan sharks.

Grameen means "village" in the local Bengali language. As a literal village bank close to home, Grameen has so far extended small unsecured loans to more than 10 million people in Bangladesh alone.

Most of the loan recipients are women. The loans are motivated by the earnest desire of each individual to start a small business like a tailor shop in order to obtain the necessary funds for their children's higher education.
They are serious about their business for the sake of children. Defaults are rare, and microcredit has been established as a sustainable business.

Initially, there was some opposition in the country, which is a predominantly Muslim country, to women working and involving themselves in business, but the bank was able to subdue the conservative opposition by drawing on the fact that the wife of the Prophet Muhammad (peace be upon him) was a businesswoman. In terms of women's activities, Grameen Bank has also made great achievements.

(Bangkok Bureau, Chikara Okudaira)

We visited Bangladesh and covered two projects that Mr. Yunus was involved in launching. One is the Euglena project to distribute nutritional food to elementary schools in slums. The other is a project to teach car maintenance skills to jobless youth and send them to Japan and other countries. Seeing their smiling faces filled with dreams, I strongly felt the potential of social business.

Mr. Yunus fundamentally rejects modern capitalism, in which the concentration of wealth creates division. Work is slavery to one's employer" and "There are 8 billion entrepreneurs in the world". His strong words overwhelmed me and gave me an opportunity to rethink my own values, which are so deeply entrenched in capitalism.

END