Founder of the Grameen Bank and Nobel Peace Laureate Muhammad Yunus has dedicated his life’s work to empowering the women of Bangladesh and lifting the world’s neediest out of poverty, by fighting the inequalities in our global economic system.
In his new book Building Social Business (out May 11th), he proposes a business model that would effect social change. He speaks to The Women’s Conference in an exclusive interview.
What are your views on welfare?
Welfare is something that needs to exist, to take care of people who find themselves in difficulty, but it should be a temporary measure. People cannot live on charity their entire life. In the process you take away their human qualities: initiative, self-respect and self-reliance.
Welfare should be focussed on helping people get off welfare. Today it works the other way - generations remain dependent on charity.
What creates poverty?
Poverty is not created by poor people. It is created by the failure of the global economic system. Human beings have been blessed with unlimited potential – simply millions of them can never find out or become aware of this wonderful gift they have. They haven’t had the opportunity to unwrap that gift.
Banking for example leaves out the majority of the world’s population as non credit worthy. We have to build a system where institutions can reach every single person, rather then the privileged few. Once you fix this, there won’t be any poverty in the world.
Your book addresses the need for a new “Social Business Model.” What is a “Social Business”?
A Social Business doesn’t follow the existing capitalist system, which is individualistic and driven by profit. We were assured by the theoreticians who created the capitalist system that it would solve all the problems in the world. It hasn’t. It has created terrible problems such as extreme poverty and global warming.
Human beings are not one-dimensional beings – they are multidimensional. In current economic theory human beings are money making robots. They are considered selfish. But human beings can also be selfless. Why don’t we create business on the basis of selflessness? This is social business – a non-profit, non-loss, non-dividend company addressing social needs. The business objective is to eliminate the social problem it is addressing.
One of the most striking examples of social business in your book is the Italian medical organisation called Cure2children, which works to eradicate deadly blood diseases like thalessemia in children. Grameen Healthcare is launching a joint venture to bring this organisation to Bangladesh and then India. Could you explain?
Thalessemia is a genetic disease that requires children to have monthly blood transfusions or costly bone marrow transplants. Cure2Children, founded by Dr. Lawrence Faulkener, a medical doctor, and Eugenio de la Mesa, an entrepreneur, operates as a charity in Pakistan and has to raise money constantly. Grameen Healthcare’s joint venture is working to make the treatment of Thalessemia self-sustaining. Thalessemia units in hospitals will treat three patients – two paying and one non-paying, or paying a token amount. We should make enough money on the paying patients to enlarge operations to treat two non paying children. So once it works out it should expand to greater capacity.
Another example of social business is the joint venture between Grameen and French food giant Danone to produce vitamin-enriched yoghurts for children with malnourishment in Bangladesh. This seems like a great example of how social businesses can develop from very simple ideas.
Yes. They are never complicated. You focus on the problem and see how you can make a social business out of it. Because we are not trying to make money it becomes much simpler.
Money makers want a 30 or 40% return on their investment. A social business focuses on the social problem and employment for those who need it. You can address chronically unemployed people, or special groups such as blind people, hearing and verbally impaired people, single mothers and orphans. How do you create jobs for hearing and verbally impaired people? You could start a pizzeria and train staff to become excellent pizza makers – they would enjoy their work, customers would enjoy the food and it would be a self sustaining business. There are many creative ways of creating social businesses.
With charity, money goes but never comes back. In social business money is recycled upto perpetuity. Profit-making is not incorrect, but I am suggesting an alternative.
What is your key message to citizens reading this article?
Citizens are very powerful. If I can solve the problems of 5 disabled people through my business, I have developed a seed which can take care of 500 million people of that nature. It’s a question of discovering my power to change the world.
This interview was conducted by Amber Haq. Ms. Haq is an educator, an entrepreneur dedicated to business creation in the field of education, social development and the empowerment of women, and a journalist for Newsweek and Businessweek.com.