About Muhammad Yunus and Social Business

About Muhammad Yunus

Muhammad Ynus

After receiving a Ph.D. in economics at Vanderbilt University in the United States, Muhammad Yunus went back to his home country Bangladesh to teach economics at Chittagong College in 1962. Because of the ubiquitous poverty surrounding him, Muhammad Yunus lent $27 USD to 42 families to pay their debt to local creditors. This initial loan eventually led to the creation of the Grameen Bank project in 1976. With the great success of the project, Muhammad Yunus founded the Grameen Bank in 1983, becoming one of the fathers of the microcredit concept.

Over time, Muhammad Yunus founded many other companies in sectors ranging from healthcare, energy, agriculture, and education, all united by their mission to address major social problems through untilizing the approaches and power of the market system. In 2008, Muhammad Yunus founded The Grameen Creative Lab in Wiesbaden, Germany in collaboration with Hans Reitz, to help accelerate the concept of social business by creating broad awareness and a movement for social business worldwide, including in the globe’s universities.

In October 2006, Muhammad Yunus and Grameen Bank were jointly awarded the Nobel Peace Prize "for their efforts to create economic and social development from below." He was awarded the United States Presidential Medal of Freedom in 2009 and the United States Congressional Gold Medal in 2013. The Congressional Gold Medal represents U.S. Congress’s highest expression of national appreciation for distinguished achievements and contributions, and was awarded for recognition of Yunus’ efforts to combat global poverty. The award made Prof. Yunus one of only seven people in the world to receive the Nobel Peace Prize, the Presidential Medal of Freedom, and the Congressional Gold Medal. Others to have been similarly recognized include Nelson Mandela, Martin Luther King, and Mother Teresa.

Muhammad Yunus has received 29 honorary degrees and multiple awards in recognition of his work and his engagement in the fight against poverty around the world. He is married and the father of two daughters.

Social Business - the Third Way

Dr. Yunus believes that within our economic system, there are currently two prevailing approaches to organizations. The first is that of the private sector where companies sell products or services to make money. However, there are important issues in our society which are not addressed by the private sector because they do not offer profit-making opportunities. This usually leads to government interventions to create legal and institutional frameworks to advance the common good and to protect the interests of disadvantaged members of society. Where both governments and the markets reach their limits, charities may fill the gap. 

The problem is, of course, that the system does not work well enough. We live in a world of terrible injustice and widespread poverty. Governments and charities have the will to improve it, but they often lack the resources and knowledge to harness the efficiency and innovativeness of the private sector. So why not have the private and public sectors work together to help solve social problems? Let's bring the methods of business to the task of solving social problems such as poverty, and create - social businesses!

Dr. Yunus advocates for an entirely new kind of business. Until now running a business has often been self-focused, founded for the purpose of making money. Unlike traditional business, social business operates only for the benefit of addressing social needs that enable societies to function more efficiently. Social business provides a necessary framework for tackling social issues by combining business know-how with the desire to improve quality of life. Therefore instead of being self-focused social business is all about others.

Source:  Grameen Creative Lab:  http://www.grameencreativelab.com 

The Seven Principles of Social Business

  1. Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.
  2. Financial and economic sustainability.
  3. Investors get back their investment amount only. No dividend is given beyond investment money.
  4. When investment amount is paid back, company profit stays with the company for expansion and improvement.
  5. Environmentally conscious.
  6. Workforce gets market wage with better working conditions.
  7. ... do it with joy.

Source:  Grameen Creative Lab:  http://www.grameencreativelab.com