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Book Review: Building Social Business By Muhammad Yunus

Book Review: Building Social Business By Muhammad Yunus

Building Social Business: The New Kind of Capitalism That Serves Humanity's Most Pressing Needs (PublicAffairs/2010) by Dr. Muhammad Yunus is an excellent rendition on how to invest in poor countries while getting a modest return and doing much good at the same time. The classic profit maximization model does not produce optimum results because many working poor simply cannot afford the higher prices. To some extent, this phenomenon is happening in the USA. Hence, there are Grameen branches in Brooklyn and Queens, New York.

Yunus guarantees loans to the poor; thereby acting as an intermediary. This is not much different from the USA government guaranteeing certain loans to borrowers. The result is that bankers are much more willing to lend money due to the guaranteed payment. Borrowers repay in small weekly amounts. Women have great drive to overcome poverty. The Grameen Bank lends $100 million dollars a month in collateral free loans averaging $200 apiece. The repayment rate is an astounding 98%.

Grameen lends money to beggars to sell toys, households and foodstuffs door-to-door. There are 100,000 beggars in the program. Since implementation of the program, over 18,000 beggars have quit begging.

Grameen offers children of borrowers money to go to school. And so, 50,000 students are pursuing medicine and engineering coursework. This program is microcredit or microfinance at its best. In some cases, a mother may be illiterate and her children go on to become physicians and engineers due to the Grameen Bank.

Grameen Violia Water sells pure water at a price that the poor can afford. In the future, the "Artificial Sun" coupled with desalination may be able to accomplish a similar feat.

The objective of the Grameen program is to overcome poverty, have a sustainable economy and have a modest return on the investment. When loans are paid back, profits are plowed back into the company not unlike the function of retained earnings in a for-profit company.

Fabio Rosa has brought solar energy to nearly 750,000 Brazilian homes with no electricity previously. There is a similar opportunity to do so for the Palestinians, if the various strategic constituencies can agree on a workable settlement.

Currently, Grameen Telecom, Grameen Energy and Grameen Well Being serve the poor. Grameen and Pfizer have a joint cooperative venture to bring affordable health care to village clinics through Grameen Healthcare.

A similar cooperative arrangement could be brought to the Medicaid program here in the United States in places like Appalachia and other rural communities where professionals are hardly ever seen practicing their craft.

The first major attempt to outline Appalachia as a distinctive cultural region came in the 1890s through the tireless efforts of the Berea College President. William Goodell Frost coined the phrase "Appalachian America" which encompassed 194 counties in 8 states.

The Grameen organizations seek to promote social business under the umbrella of charitable organizations and non-profit groups. Universities and think tanks are another great resource for Grameen and its people. A successful program has been underway to cross-fertilize the poor and the wealthy to deliver affordable bone marrow transplants for everyone. The assignment algorithms in linear programming and operations research may be utilized to bring together donors and patients alike.

Overall, the book is well written by a popular Nobelist-Dr. Muhammad Yunus. The ideas contained in this book could be applicable to both poor and rich countries since virtually every country on this earth has poor people in every walk of life.

Joseph S. Maresca Ph.D., CPA, CISA, MBA: His significant writings include over 10 copyrights in the name of the author (Joseph S. Maresca) and a patent in the earthquake sciences. He holds membership in the prestigious Delta Mu Delta National Honor Society and Sigma Beta Delta International Honor Society. In addition, he blogs and reviews many books for Basil & Spice. Visit the Joseph S. Maresca Writer's Page.

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