Through micro-credit, the new economy imagined and practiced by Muhammad Yunus is now recognized around the world. And benefits directly or indirectly to nearly 300 million people. If he refuses the term “philanthropist”, the Nobel Peace Prize 2006 wants to be the Ambassador of “social business”. During his stay to Paris, he answered questions of Le Monde des Fondations et du Mécénat.
Do you consider yourself as a philanthropist?
If philanthropist means giving a lot of money, so I’m not. I’m trying to achieve similar goals to philanthropy but in resorting to models of companies. Therefore money is recycled again and again. If philanthropist means giving his own money to help others in charitable way, so I’m not your guy!
You say that philanthropic money has only one life, what do you mean?
In the context of education, for example, when an educational project is supported, you give money to someone, and once the person has finished his studies, money is lost. What I set up in Bangladesh is the granting of loans to students in order to finance their studies. As it is a loan, once that person has a job, she must repay the loan. This money, once it is repaid to the lender, will again be lent to someone else. Indefinitely, a sum of money can be used for years; this is what makes the difference between philanthropy and “social business”.
Another example, the “Grameen Eye Care Hospital”, created in Bogra works through cross-subsidization, that is to say that the richest people pay the full price and the less wealthy pay only what they can pay in general glasses and frames, but they don’t pay for additional services. The very poor people receive the same service simply by paying 1 dollar. This project could have been done in a philanthropic way that is to say that we could give money and distribute free glasses, except that every year, it would have put money to restart the pump. The specificity of this hospital is that it is really a “social business” because it lives with a business model because it sells, accessible even poorer because the rich pay more. The money from the “Grameen Eye Care Hospital” was brought by the Grameen Group, but eventually everyone could finance this kind of project an individual, a fund, a bank, in fact everyone can do this type of boot initiative.
You’ve created the Grameen bank in 1976, what do you remember about that time?
Grameen Bank was created at a time when the country was in a situation of extreme poverty, with 80% of the population living below the extreme poverty. The situation was really terrible because people had no home, nowhere to sleep so down, there was not toilet, the children were skinny and women had only one clothe, and when the women washed it and if it was raining, the clothe will not dried, they could not leaving home.
What is interesting is that this period marks the beginning of the Grameen, and you do not have happy memories?
At first, it was difficult to try to replace the loan sharks who applied really high credit rates. For example, when women wanted to buy bamboos to make baskets, it cost them dearly, but once they had sold their baskets, loan sharks took up all the money to cover the interest rate. That the Grameen Bank’s main contribution is that women have been able to keep a small profit of these transactions and they have managed to develop a livelihood with what he had left.
Today they are 300 million people that are benefiting for micro credit in the world, what do you think about this?
This is a huge number! This can transform people’s lives because it allows them to generate a small income. However, this number is still not enough! Today with 30 years of experience, we know how it works and so it should be much more common because it is not millions but billions of people who should have access to credit. I am telling you, the micro credit should be making part of human rights!
Are you proud of what you achieved?
I am happy that all this is possible! Today experience has shown that it was possible to provide micro-credit to the poor but also the rich people, both those who live in rural or urban areas, the people who are immigrants or not or again people who are a little left behind. Micro-credit works, today it should be better integrated into the formal financial system. The financial crisis of 2008 has released the need to rethink and recreate the economic system because it showed major weaknesses: it is necessary to provide it more universal and it is especially redesigned including populations.
You had with Grameen Bank, Nobel Peace Prize in 2006. Are you sensitive to these recognitions? What is the most important for you, the awards or congratulation of people?
These rewards are very important because it is so much opportunity for governments to show that they adhere to actions. When I collected the Nobel Peace Prize in 2006 or the Golden Medal of the U.S. Congress in 2013, I thought “ if you endorse my actions, it must pass laws to make it possible”. Each time there is a reward; it weakens the opposition and reinforces adherence.
Can you tell us about the links between you and the Crédit Agricole ?
Eight years ago in Bangladesh, I met Georges PAUGET, former general manager of Crédit Agricole and Jean Luc PERRON, today general delegate of Grameen Crédit Agricole Foundation. They wanted to create a microfinance initiative. I told them there was a great need of funding for microfinance institutions. Together we have created the Grameen Crédit Agricole Foundation. During the inauguration, there were many famous people like President CHIRAC. Georges PAUGET left his position but his successors took over and set up an investment fund. I hope other banks will follow this example.
How do you see now your future? Do you feel that you are like an ambassador for micro finance and social business? Are you already thinking about something new that you would like to develop?
Today “social business” includes microfinance but in fact the “social business” is much broader than microfinance. In fact, with “social business”, we can speak of employment, environment, technology is a limitless tool. My goal, right now is to try to explain what “social business” is and what can be done with it. My wish is that in 2020, 5% of the global economy will be invested in “social business”. If this happen we could live in a totally different and much more positive economy.