The world must abandon the logic of profit
Muhammad Yunus, Nobel Peace Price in 2006 and promoter of microcredit in a new book defends the idea of more humane economy(1). In it, Professor Yunus explains the basics of the message.
How important to the world is what you call social business?
The social economy is only now a small share of the global economy. To imagine an economy disconnected from profit scares people because the world is blinded by greed. But this conception of the Man, represented by the current economic model, is narrow and does not account for altruistic dimensions of the human being. With the social business, I demonstrate that it is possible to do business while acting on a social problem. Take the example of Grameen Danone which produces fortified yogurt affordable for poor families in Bangladesh in order to fight against malnutrition. Does this mean that this French company has lost its mind? I do not think so.
What is the difference between social entrepreneurship and social business?
Social entrepreneurship is a very popular word, often confused with the social business. The social entrepreneur seeks profit while addressing a social problem. But the basic principle of social business is based on the total absence of dividends. An investor may recover the amount invested in a social business, but no more. Another example is that of Grameen Bank. Grameen Bank is certainly a for-profit business, but it belongs to the poor, who reinvest profits. So it is a social business.
Are there limits to social business?
No, no. The economy has enormous potential given the number of poor people. Imagine the number of social businesses that we could create just to allow access to energy for each home! Companies would be created to deliver affordable solar panels to each family. Their goal is not to make profit but to protect the planet. I created a fund in Haiti for the social business. Instead of waiting for international institutions to rebuild the country, I encourage Haitians to create social businesses to meet the needs of their own country. In addition, the social business is not limited to poor countries, it can also grow in rich countries, such as the United States, to improve access to health, for example. There is no obstacle to the development of social business because human creativity has no limits.
Should social busines replace charities?No. Such associations are required to respond to emergency problems, such as natural disasters, population displacements. However I think that instead of allocating all donations to the development of charities in poor countries, 10% of these amounts should be set aside for the creation of a fund for social business. I am confident that with this funding, social businesses could be set up that are more effective against poverty. On one condition however: that social businesses are created under the impulse of citizens, and governments get involved. The following year, the operation is repeated with the same amount to help create new businesses. This is simply to plant a seed and help it grow and multiply. The world must simply pass out of the logic of profit.
The concept of profit has take root in the microcredit sector in India...
This is a drift of microcredit. When a microfinance institution makes loans at rates above 15%, we can not talk about microcredit. In addition, organizations that enter the stock market will show a profit and start to deviate from the basic principles of microcredit.
How to prevent this drift?
We must impose limits on interest rates to be charged by microfinance institutions. In addition, each country should establish a regulatory authority of microcredit, as is the case in Bangladesh for the past five years. This authority shall issue a license to microfinance institutions. It will oversee their interest rates and allows for greater transparency. I have worked to developed microcredit to enable poor people to improve their living conditions. I hope this continues.
Interview by Richard Clemence
(1) For a more humane economy, Ed. JC Lattes, 305 p., 20 euros.
