Micro-finance visionary has big plan for poverty
Nobel laureate pitches concept of 'social business'
by Sneh Duggal
The Nobel laureate who used micro loans to help Third-World entrepreneurs work their way out of poverty says its time for the developed world to change the way it does business.
Dr. Muhammad Yunus is an advocate of "social businesses" -- companies that address problems such as malnutrition, drug addiction or unemployment.
Social business has a role in Canadian society, said Yunus, who received an honorary law doctorate from Carleton University on Wednesday.
"Social business is not for some African countries having lots of difficulties, it's wherever those difficulties exist," he said. "Whether it's in Canada or the U.S., African countries or Bangladesh, we bring our creative minds to create a social business to solve it." A social business is not a charity, but not a profit-making venture either. Investors are entitled to retrieve only their initial investment. Any profits are reinvested, allowing the business to be self-sufficient.
The government, for example, could set aside 10 per cent of its welfare funding to create social businesses that would help get people off welfare. Yunus added that social businesses could also help individuals on native reserves by providing health care, jobs through outsourcing or small loans through a micro-finance institution.
Yunus won the Nobel Peace Prize in 2006 for his work as the founder of Grameen Bank. Established in Bangladesh in 1983, the bank gives low-interest, collateral-free loans to allow borrowers, mostly women, to set up small businesses and get out of the poverty cycle.
Yunus' bank is looking to establish a social business in Haiti that will focus on reforestation.
In his mission to help eliminate poverty, Yunus is advocating change to the world's banking and business systems.
"The financial crisis was a big wake-up call -- we know we woke up, but don't want to open our eyes," said Yunus, "We have a chance, we can get out of it." His proposal for social businesses is outlined in his book, Creating a World Without Poverty.
Humans are both selfish and selfless, but conventional economic models have focused on making a profit -- the selfish aspect, Yunus said.
"Let's bring the selfless part into the economic crisis." "Poverty, after all, is not in the poor people, it's not the fault of the poor people," Yunus said. "Poverty is externally imposed on the person, so if it is an external imposition, then we can fix it." Grameen America began operations in the U.S. in 2008 and has opened a few branches in Nebraska and New York.
While individuals have made attempts to establish micro-finance institutions in Canada, Yunus said more work is needed.
Initial criticism of Yunus' microcredit model involved those who did not think the poor would pay back their loans, but Yunus said this was not the case. Grameen Bank has loaned more than $9.4 billion to more than 8.1 million people, most of whom are women.
"Anyone should have the right to enter into the financial service to borrow money, even the beggars on the street should have the right to do that," Yunus said. "Credit should be accepted as a human right."
Source: http://www.ottawacitizen.com/business/Micro+finance+visionary+plan+poverty/3482302/story.html
