In the early 1970s when an academician from a third world country came across the victims of a moneylender, he did what good Samaritans usually do in such circumstances: he took charge, paid off their small loan, securing a temporary release. Then the academician did something many probably would not have done. He decided to put the affected community members (residing in rural Bangladesh) in charge and sought a permanent end to their financial woes. Since the only government-sanctioned weapon needed to combat this menace (banks) flatly refused to help (and the good Samaritan was neither a millionaire nor a magician), he decided to forge one on his own.
That a paltry sum of $ 27 could make such a difference in 42 lives caught in the moneylenders’ net led to the development of an intriguing concept, one that advocated that extending a financial lifeline to those deemed to be non-creditworthy makes good business sense. So, under the direction of academician-turned-humanitarian Muhammad Yunus, the first Grameen Bank was set up.
A financial institution that introduced the concept of micro-credit, lending tiny sums of collateral-free loans to destitute families (mostly women), does more than simply bail them out of trouble. This was a bank for the poor and owned by the poor, giving them a real shot at life and setting them up with economic opportunities in the bargain, besides of course putting the exploitive members of society out of business.
Muhammad Yunus’s work was not finished; other problems beckoned him and he made it his life’s mission to change the foundations of a useless system, one social business at a time. Muhammad Yunus, now a veteran, has a new vision and in “Building Social Business…..”, he looks back at past achievements and ahead at future possibilities. But first he sets out to explain his precious concept to the mystified public, who are hearing the term for the first time.
A social business model is devised with a twist; it does not recognise the traditional lines set by conventional businesses, and takes profit out of the company equation. Except for the profit part, a social business is just like any other business and modelled on the same principles. But, as Muhammad Yunus will tell you, it is very different from other charitable institutions.
He goes to great lengths to differentiate between charities, cooperatives (co-ops), NGOs, foundations or the corporate social responsibility side (CSR) of businesses and his pet projects. A social business is self-sustaining, the needy are the sole beneficiaries, and anyone can be a social businessman; starting small is encouraged, research is imperative, and “impatience” can be a virtue. Also, social benefit and profit are compartmentalised; the twain shall never mix and the poor take all.
One man has made a sustainable business model that quietly challenges the established ways of doing business. It already has a global seal of approval, having been emulated all over the world. He admits that his idea does not signal the end of profit maximising businesses, but widens the playing field, giving “new options to the consumers, employees and entrepreneurs and raising social awareness among the business community”. Where other systems have come close to crashing or, in the case of developing nations, failed on a spectacular scale, Yunus can put his string of successes on display for those shopping for new ideas.
After the successful field-testing of financial services, he branched out and partnered with other companies to launch projects like Grameen Danone (offering nutritious food products), Grameen Veolia Water (solving the arsenic laced water supply problem by providing clean drinking water), and Grameen Healthcare, while creating jobs in the process.
Social business has many admirers: Adidas, BASF, Intel, Otto GmbH are some of the major players involved with Grameen projects. But it has not always been smooth sailing for the banker to the poor. He includes the lessons learnt from his 40 years experience, and takes aspiring social business owners through the steps of not only building a successful business, but also rebuilding society in the process. He also leaves behind a nice little template for motivated individuals ready to take their first idea for a spin.
Yunus may be an astute (social) businessman, but he also has a savvy side. He is quick to point out that working for any social business does not mean lowering one’s standards, for they offer employees competitive salaries and benefits; it simply means not profiting from the poor. Social business owners normally step in where governments fear to tread. The global ambassador of the poor teaches humanity how to take their natural altruistic impulses forward properly. M Yunus has a Nobel Peace Prize 2006 (shared with Grameen Bank) to show for his efforts, and is already playing around with the building blocks of a new poverty-free world order.
Published in Daily Times under the title of ‘Business with a catch’.
Publisher: Public Affairs
No of Pages: 254
Price: Rs 1,795
Available at Liberty Books
Afrah Jamal is is former Editor Social Pages & a freelance journalist who blogs at afrahjamal.blogspot.com. She can be reached at firstname.lastname@example.org