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From Microcredit to Social Entrepreneurship
Call him the Gandhi of our times.
The Mahatma ended colonialism using non-violence. Nobel Laureate Muhammad Yunus is lifting millions out of poverty with microcredit (lending small amounts to the neediest). Now he's onto another revolutionary idea, "social entrepreneurship" (you invest not to make a profit but to do good, while still recouping your principal).
Yunus, like Gandhi, is humble in manner as well as dress: a simple long cotton kurta, shirt and vest. And wise, witty and patient.
When colleagues at his Garmeen (Village) Bank in Bangladesh grumbled that only 12,000 of the 100,000 beggars it lent money to had given up panhandling, Yunus responded: "Give them time; they are restructuring their business. They know which houses are good for begging and which ones are good for selling. They are into market segmentation."
The American-trained economics professor came to his calling by accident. In the 1970s, he loaned $27 to some destitute craftspeople, and witnessed two miracles: All used it well and none defaulted.
Garmeen Bank was born. Today, it lends about $1 billion a year (average loan: $160), to 7.5 million borrowers (97 per cent women), without collateral, and boasts a 99 per cent repayment record.
Garmeen inspired a worldwide microcredit movement. Toronto philanthropist Martin Connell was an early convert, establishing Calmeadow Foundation (I was once a director). On Monday, Connell had Yunus speak to Canadian philanthropists and bankers. There Yunus outlined his vision of a world without poverty.
"It's not utopian. The United Nations Millennium Goal is to reduce poverty by half by 2015. If the world believes that we can do that, it's just another step to eliminate poverty altogether."
When he called for more entrepreneurs to invest in socially responsible businesses, "people told me, `You are crazy. Why would anyone invest in a company that won't make money?' I said, `People are even crazier. They just give away their money.' Charity has only one life, whereas social entrepreneurship creates a cycle."
He got French food company Danone to make nutritional yogurt for Bangladesh kids. Garmeen gave local milk suppliers credit. The supply chain is working and Danone has recovered its investment.
Similar projects are underway with German, British and American companies.
Garmeen has 26 such enterprises. Among them: a mobile phone company (the largest in Bangladesh); a solar energy company (installing 7,500 home panels a month); and a clean water company.
He envisages a universe parallel to the capitalist free market: a new stock market for social businesses; a Social Wall Street Journal; business schools producing social MBAs.
Last year, he was urged to be a candidate for prime minister. The last two elected Bangladesh leaders, Sheikh Hasina and Begum Zia, both women but both facing corruption charges, had left a vacuum for the military to fill.
Yunus agreed but then withdrew. Why?
"I thought I'd form a corruption-free political party. I tried all my friends - professors, journalists, and business people. They all said, `No, it's a corrupt world.' And the ones who did want to join me were corrupt. So I gave up."
His fame has not saved him from being harassed at times at American airports.
As a Muslim, "you don't have an easy path. You are looked at differently. My name, Muhammad, doesn't make it easy ... But there are also lots of people of goodwill who are friends."
What does he make of the war on terror?
"You cannot stop terrorism by military means. How did the terrorism originate? Because of a sense of injustice? Did you deny people their political rights? Took over their land?
"We must go to the root causes, rather than throw some bombs and think that's the solution. That's no solution. You can suppress it for sometime but it'll only come back with a vengeance." --Haroon Siddiqui
© Copyright Toronto Star 1996-2008
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9 Comments so far
Show AllGhandi was too much of a big joke overall. Yes, he was successful at getting Britain off of controlling India the peaceful way but even that is debatable. The Hindus never went on the offensive and even to this day, both them Christo and Islamo fundies are tearing India's culture apart as they have done in other countries. Like America, the sheeple allow corrupt politicians who are anti-Hindu, pro-corporate, pro-fundie to tear down sacred temples and farmlands to set up crummy golf courses and corporate labs where all the slave labor goes. Why isn't CD mentioning this? And why isn't CD confessing the fact that in America, India, China, Russia, most of Africa, and even a great deal of Europe, the so-called "Left" is FAKE ? Ghandi is a total. MLK is a better role model for non-violent victories.
P.S.:
Ghandi never really stood for all people of India. As a matter of fact, he stood against his wife and children who have shown their justified anger against him.
FYI, an interesting account of a booksigning by Dr. Yunus.
Gandhi was a great man. So was Martin Luther King. They BOTH accomplished much in their short lives on this planet. Why not accept their qualities as something to which to aspire. Neither was perfect. We aren't either.
I admire and respect Yunus immensely. The absence of greed in his successful efforts is inspiring.
""You cannot stop terrorism by military means. How did the terrorism originate? Because of a sense of injustice? Did you deny people their political rights? Took over their land?"
I have one question, why is everything posted on CD blatant spin for the corporate police state and war machine?
Take this quote above. Terrorism came about through funding and training by the secret services to create an excuse to continue military and police state policies in the Middle East and elsewhere throughout the empire. But, the lie is this one quoted above. Since it appears on a 'liberal' site, liberals are supposed to take this as their cue… it's true in all the ways that 'alternative' viewpoints are.
CD is really doing a number (or at least launching a very aggressive attempt at it) on people's heads.
Also, Mahatma certainly did NOT end colonialism. I stayed with the Desai family of Bombay in 1970. This family was one of the four top wealthiest families of India, both father and son having been educated at Oxford.
We happened to be visiting because my father was asked to establish a high tech industry in India. His collaborators? The English trained Indian elite.
Colonialism/Imperialism is far more robust today due to better control of local economies by the use of native born managers implementing programs drafted in London, Berlin, Maryland, Boston, Geneva, etc.
Sustainable businesses that are independent of banking controls are being destroyed the world over, not just in the fully incorporated US.
You can be sure that all of these programs are primarily supported only for the purposes of introducing fine granularity controls over who is allowed to do what where.
Some very astute observer recently commented that even fair trade businesses generally thwart independent operations by transferring power to outsiders who can afford the fees to become certified.
There are so many businesses in the third world being destroyed by market saturations, forced debt, etc. After the destructive phases… along comes someone who then sits down and introduces programs to determine who can have the resources to start a business… the sort that bolsters not local independence but corporate dominance.
The hypocrisy of these programs is total.
I worked with the Environmental Business Cluster in San Jose over ten years ago with many of the same stated objectives. These programs are deceptive covers for corporate programs to repress, not assist, local economies and are run by hypocrites who have no intention (or ability) of addressing root causes.
These are control paradigms launched under very deceitful 'liberal' auspices.
But, there is no doubt that minimal capital in many areas around the world can ignite incredible things... the talents that are being repressed by lack of opportunity are hard to miss. But, being allowed to do this, even if you are the donor of capital and/or investor depends upon having a favorable status with the international military order that ultimately controls all economic opportunity and access to markets and capital at local levels.
Micro-credit programs exist today as a pet infiltration scheme of the CIA and other secret service surveillance and control programs.
Whenever you come with bags of capital and connections into an impoverished region, the keys to the city are willingly given... it's a great way to grease local acceptance and gain access to a people's trust.
Almost as soon as the bombing of Afghanistan began, the micro-credit people hit the ground running (from Mercy Corp and others) to curry local confidence and introduce new programs to sift (collect info on) the population.
Stop. Haroon you should know better. I have seen first-hand how impoverished third world farmers are suckered into taking on debt by companies such as General Electric GE. Micro-credit, which started out as a benevolent excersize in capitalistic economics, has been hijacked by corporations.
There are organizations, Freedom from Hunger, Kiva.org, who are trying to use the Grameen model, to create good in the world. But there are millions of poor farmers around the world, who are trading in their five hectares, for a DVD player and an air-conditioner.
You can revel in the accomplishments of Muhamed Yunus, but you owe it to the readers, to also reveal the dark side of micro-credit.
Excuse me HAROON, but a kurta is a collarless pull over shirt, so poor Yunus was apparently wearing two shirts and a vest but nothing down below. Might he not have been wearing a lungi (sarong in SE Asia), a kurta, and vest?
The posts that criticize micro credit programs for making the world save for crony corporate capitalism are awfully short of evidence and even shorter on plausibility. Why would any of biggies give a tinker's damn about micro businesses in parts of the world with too few bucks for them to turn a profit on?
RETIRE GREEN: You are surely right that small farmers are being seduced or driven from their land by deceptive offers of credit. But WTO, the World Bank, and IMF, all in US's pocket, are far more responsible. The Big 3 have for decades demanded that farmers leave behind sustainable and generally successful production of food for local people so the farmers can produce cash crops to repay loans taken by corrupt governments. Then they insist that "open their markets" to super-subsidized food produced in the US and EU, which drives more farmers from the land into mega-cities where few of them can earn enough to feed their families let alone buy "a DVD player and an air conditioner."
An anecdote about small farmers:
Best rice I've ever eaten was in Barrio, Sarawak, Malaysia. Each farmer's padi is about 3 acres and is worked by humans and water buffalo, who kindly renew the soil with their droppings. The experts came in with fertilizer so the farmers could increase their yield. Oops! The plants grew twice their normal size, the yield was down a bit, but no one wanted to eat the rice. Don't think we'll borrow to get less. The experts' second try was double cropping: got less from two than had from one with the old ways. The farmers continue to grow their rice in the traditional way, manage to feed the people of their valley and export some. The people in the valley have schools for their kids though the 10th year, a modern village constructed library with satellite linked computers, 24-7 nurse practitioner level health care. They live quite comfortably despite the fact that everything imported costs three times its price in Miri the nearest city. And taste matters. Last summer in Kuala Lumpur, a kg of Thai premium rice cost $1.30, of Malaysian rice about $.90, of Barrio rice $2.30.
As WILLYBILL reminds us, none of us is perfect. So too, micro-credit and social entrepreneurship and fair trade ain't perfect, but they're sure a hell of a lot better than anything else on offer. Any of you nay-sayers got a better idea?