Listening to his story about how Grameen Bank came to be established, one cannot help but be inspired by the vision of a man who not only challenged the assumption of conventional banks that the poor were not credit worthy, but had the courage to go ahead and demonstrate that lending to the poor was a viable and profitable business.
Jeff Mowatt
- Measured and calibrated in human terrms
September 19, 2011
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Yunus Centre Yunus Centre Highlights The human side of enterprise
Yunus Centre Yunus Centre Highlights The human side of enterprise
| The human side of enterprise |
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By Prof Tan Sri Dr Sharifah Hapsah Syed Hasan Shahabudin
UKM's laureate-in-residence believes that society's most pressing problems can be solved through social business, a revolutionary idea that has caught on around the world. A GREAT man came to fulfil his laureate-in-residence obligations at Universiti Kebangsaan Malaysia (UKM) in July. Dr Muhammad Yunus, who founded Grameen Bank and pioneered the concept of microcredit as a viable business, won the Nobel Peace Prize in 2006. The laureate-in-residence is an initiative to inspire and spur students as well as staff in UKM to want to do better, work harder and have the courage to dream and try new things that will bring great change to the world. It teaches us that great ideas can come from anywhere and great things are possible.
Delivering his professorial lecture at UKM to a packed hall of academicians, university students, pupils from neighbouring schools including PermataPintar, representatives from the private sector and non-profit institutions as well as civil society, Dr Muhammad shone through as a person who has remained humble and unassuming although he is celebrated by the world. His life mission to help the poor began in the early 1970s when he was heading the Department of Economics at Chittagong University. Bangladesh was hit by a terrible famine, worsening the misery of a people who were already suffering from the aftermath of war, floods, droughts and monsoons. Finding emptiness in teaching elegant theories of economics when millions of Bangladeshis were distressed, Dr Muhammad ventured to the neighbouring village of Jobra on one fateful day in 1974 hoping to make himself useful to at least one person. It was there that he uncovered the struggle the villagers had to endure to find the tiniest amounts of money to support their efforts to eke out a living. Denied financial services by banks which considered them not credit worthy, they resorted to loan sharks who kept them in perpetual bondage of poverty. He concluded that poverty is not the result of any incapacity on the part of the poor but created by the deficiencies in the systems we have built. He repaid the loans of the Jobra villagers amounting to a mere US$27 (RM84) and worked on the idea of offering small collateral-free loans called microcredit to the poor, devising simple rules and method of repayment. From that tiny spark grew the Grameen Bank, which soon spread to other parts of the world. In Malaysia, the idea gave birth to Amanah Ikhtiar Malaysia. Dr Muhammad also saw what conventional bankers never did. Serving the financial needs of women - the victims of non lending by conventional banking, even if they belonged to a high income bracket - brought immediate benefit to the children. It dawned on him that it was a powerful way to combat poverty for the entire society. Grameen Bank also offers affordable loans for children of the borrowers to pursue higher education, encouraging them to pledge to be job givers, not job seekers, when they graduate. This plants the idea of entrepreneurship early in their lives. As laureate-in-residence at UKM, Dr Muhammad is bringing another revolutionary idea, expounded in his lecture entitled "Social Business: a Way to Solve Society's Most Pressing Problems". Social business harnesses the energy of profit-making to create self-supporting, viable commercial enterprises that generate economic growth even as they produce goods and services that are dedicated to solving the social, economic and environmental problems that have long plagued humankind. Profits are used to expand the company's reach and improve the product or service to a greater extent than a traditional for-profit corporation. Social business capitalises on the multidimensional aspects of being human - political, social, emotional, spiritual, environmental and so on. Happiness comes from these other sources as well, not just from maximising profits as portrayed by existing theories of capitalism. People are happy to give money to support organisations they believe are making the world a better place to live in by solving problems such as hunger, homelessness, disease, pollution, ignorance and energy crisis. They are also willing to volunteer their creativity, networking skills, technological prowess, life experience and other resources. Philanthropy, charities and existing practices of corporate social responsibility thrive on these noble aims. Social business, however, does a better job of achieving the same goal. Through the Grameen Bank, Dr Muhammad has created social businesses with renowned companies based on the simple principle that the owners do not take any dividend beyond the return of the original investment. Through joint venture enterprises, the poor can afford essentials such as delicious yoghurt fortified with micronutrients, safe drinking water in an arsenic contamination area, chemically treated mosquito nets and cheap shoes, among others. Success of the companies is judged not by the amount of profit generated but by the social benefits such as the number of children who escape malnutrition and reduction in parasitic infections. As laureate-in-residence, Dr Muhammad will help set up the Yunus Centre for Social Business (YCSB) as part of UKM's entrepreneurship and innovation initiative. At this Centre, students will learn how they can embark on business dedicated to helping others, as opposed to the traditional money making business for personal gain. YCSB will help them design social business and even launch the companies in their final year to express their creative talents in changing the world. With the participation of the private sector, we hope to help realise Dr Muhammad's vision of social business in radically changing the fundamental architecture of the capitalist economy. Prof Tan Sri Dr Sharifah Hapsah Syed Hasan Shahabudin is the vice-chancellor of Universiti Kebangsaan Malaysia. Source: http://thestar.com.my/education/story.asp?file=/2011/9/18/education/9518367&sec=education |
"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings. Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion.
Each of us who have a choice can choose what we want to do to help or not. It is free-will, our choice, as human beings."
This core argument was the starting point for our own social business.
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