Nobel Peace Prize winner Professor Muhammad Yunus has called for “a more inclusive banking system” to help creative social businesses around the world flourish.
In a speech at Nesta, which was live-streamed on the internet, he said that the global financial crisis in 2008 proved that the current capitalist model was not working.
He said that the lesson learnt from the crisis was: “The rich are not credit-worthy but the poor are credit-worthy.”
The founder and until recently managing director of microfinance bank Grameen in Bangladesh, said that the way out of poverty around the world was to provide an alternative to loan sharks.
Setting up social businesses
According to Yunus social businesses can be set up to “solve a particular problem” and can respond much quicker than government as they can take risks and experiment.
He said that people have both a “selfish and a selfless side” and he wanted to “open the door” to encourage people to take part in social business.
One of the important features of a social business is that it creates jobs, Yunus said: “In a profit-making business when you create that business the objective is maximum profit and the creation of jobs is a by-product. When you create a social business creating jobs becomes the objective not the by-product.”
Modern technology has made it easier and quicker for people with ideas to meet up with potential funders.
Yunus said: “The generation of young people today have much more power – many times more than the generation before them because technology has brought them to a level where there can reach out to many things.”
Corporate partnerships
In recent years the Grameen Group has partnered with international companies who were keen to get involved social businesses.
Yunus gave the example of Grameen Danone Foods – a social business partnership between the Grameen Group and Danone Group to provide food for poor Bangladeshi children.
This supports his idea of every human being having a selfless element, he said. “It is not like I am going out and persuading them to do it so there must be something there.”
