‘People are not money-making machines’
A capitalist economy is inadequate. So says Muhammad Yunus, the father of microcredits. In the sober headquarters of his Grameen Bank in Dhaka, the Bengali winner of the 2006 Nobel Peace Prize argues passionately for ‘social business practices’ and the ‘recycling’ of money. “Doing business is only about making as much profit as possible. But people are not money-making machines.”
More and more businesses in the West are attracted to socially responsible business practices, doing business ‘properly’; taking people, society and the environment into account. But for Muhammad Yunus, an economics professor, that is not nearly enough. “The ultimate goal is still to maximize profits. But humans are not one-dimensional beings, not money-making machines for people who only care about money. It is only one aspect of life.”
Doing the right thing
To do justice to whole human beings, Yunus says you need at least two types of businesses: the familiar profit-oriented businesses and businesses with a social purpose and no personal profit motive. “The latter I call social businesses. Actually it is the difference between putting yourself or the other first; between making a profit and not incurring losses, so that you do something good for the world.”
From behind his desk, surrounded by hundreds of books, the charismatic crusader against poverty says emphatically: “Look, poverty was not created by the poor. There is nothing at all wrong with these people. They are just as capable and inventive and have just as much potential as others. But the system simply never gave them a chance to grow. So the traditional business concept does not apply and needs revision.”
According to Yunus this is quite possible because ‘doing the right thing is in people’s hearts’. “If we want to tackle problems like poverty, disease, lack of drinking water, street urchins and drug abuse, then we are in dire need of social business practices. But with a business-like approach, so that money can be recycled.” This is the big distinction between social business practices and charity, says Yunus. Money from charity only has one life; money from social business practices has eternal life.
As an example he mentions the Grameen Danone Company, a joint venture between his Grameen Group and the French dairy giant Danone. For two years now this company has been producing yogurt containing all the necessary nutrients for malnourished children in northern Bangladesh. “Millions of children in this country suffer of malnutrition. To reach even the poorest people, the price of yogurt was kept as low as possible”, Yunus explains. “The goal of the company is to lower the incidence of malnutrition. Neither Grameen or Danone share in the profits. The success of the company is measured by the rising number of healthy children. The point is not how much volume we turn over, but how many children get better.”
At the same time the yogurt factory in Bogra stimulates independent entrepreneurship; with the support of the Grameen Bank, of course. The factory buys milk from farmers who bought their cows with microcredits. People selling the final product have also received loans to buy the yogurt. By selling the dairy product door-to-door, they have an income and they can pay off their loan.
Social stock market
What he and Danone are doing with a nutritionally fortified yogurt can also be achieved with for example water, healthcare and medicine. He smiles broadly and his eyes twinkle. Yunus can see it now: an international stock market for social companies. “The current stock markets are still only concerned about money, money, money. But where do I go if I want to use my company to help people? A special stock market for these types of businesses would be a solution. Everyone can buy stocks in a company of their liking that also appeals to their social conscience. In this way every company can participate in social businesses and making money becomes a tool in achieving social goals, not just for the sake of making money.”
In March 2011, after months of government attack, the Bangladesh government fired Muhammad Yunus from his position at Grameen Bank, citing legal violations and an age limit on his position.Bangladesh’s High Court affirmed the removal on 8 March. Yunus and his Grameen Bank are appealing the decision, claiming Yunus’ removal was politically motivated.
1We – One World Experience, the new style empowerment foundation, has several empowerment projects in Bangladesh combined with microcredits. Please visit: www.1we.com