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People first. Profit follows.

WH E N B U S I N ES S B EC O M ES S O CI A L

T H E M I N D - B L OWI N G C A SE O F

M U H A M M A D Y U N U S


"Poverty is the absence of all human rights.

The frustrations, hostility and anger generated

by abject poverty cannot sustain peace in any

society. Once poverty is gone, we’ll need to

build museums to display its horrors to future

generations. They’ll wonder why poverty

continued so long in human society"


Don’t you ever wonder why a few individuals'

personal net worth is almost as big as a national

GDP while billions dwell in deprivation? How

come that food-insecure people still exist in the

21st century? The rules of our contemporary

era’s economic game are totally one-sided, as

wealth is accumulated and is not fairly

reallocated. Poverty exists insofar structural

issues exist, not due to people’s choices. Nobel

Peace Prize and microcredit pioneer

Muhammad Yunus points out, at Ca’ Foscari

university’s lectio magistralis: “Poor people are

like bonsai trees, there is nothing wrong with

the seeds, but by planting them in a flower pot

they find rejection in every corner so they are

doomed to be small”. Microfinance is the

innovation the world might need. It consists in

supplying small-scale banking services to those

who are rejected by conventional banks

because they are too poor, aiming at

developing small businesses in return.

It is a huge reform, if not a clear denunciation of

our egoism-based economic system, remarking

that the provision of credit at a high interest rate

to those in need is totally unreasonable.

Microfinance institutions assign loans to

individuals, but a cooperating group has to be

held jointly liable if repayment difficulties happen

to emerge. The crucial strength of this specially

designed system is social support because

through the process of earning and saving in a

community, a firm relation is set, with discipline

and mutual awareness, without pressure for

restitution and interest. The borrowing institutions

are part of such foundation and benefit from

social unity, trust grows with investment and new

businesses advance, with national prosperity, at a

pace that would otherwise not occur in the norm

of an impoverished setting. The poor become

small business owners and autonomously achieve

financial reliability.

In 1974 Muhammad Yunus, head of the

economics department in Chittagong

University, Bangladesh, went to his village

during the famine; witnessing disaster and

people left dying of hunger activated in him an

eagerness to see what he could do to help.

Wars, floods, droughts and monsoons

aggravated the social inequality and chaos.

Poverty reigned and the "loan sharks" did not

care. In such circumstance, to borrow 7 cents

there was a cruel interest rate and the

moneylender basically got free stuff, while

families suffered becoming virtual slaves and

had no hope to escape from their miserable

situation. Yunus paid off the terribly inflated

debts the whole village had. But charity was

not enough, it is not a solution, it is a good

gesture with one short life. Therefore, he went

on to look for a way not only to lend money

fairly but most importantly to support efforts to

expand business. Investment was key to

gradually get out of poverty. And surprisingly to

a patriarchal society, women were in the lead.

He observed the strength of women managing

the house and their craft-based skills;

their hard work was encouraged and paid back,

transforming them into the new “breadwinners”.

That’s how Grameen Bank was founded and now

it lends out over $100 million a month in

collateral-free loans. Beggars disappeared slowly,

becoming small CEOs of products they could

make, 50,000+ students are pursuing higher

education, more employment and renewable

energy are provided thanks to such financing.

They worked with dairy company Danone to

distribute affordable yogurt too, with additional

nutrients for children. Muhammad Yunus got,

then, the Nobel Peace Prize in 2006, for "the very

high contribution to the development of social

innovation and to the creation of value thanks to

an innovative management of microcredit that

has institutionalized small loans for entrepreneurs

who do not have access, due to a too low income,

to traditional banking circuits. The result was a

profound social revolution in the direction of a

more modern and tolerant society with an

increased role of women in communities".

His attempts reinvented furthermore what is

considered “homo economicus”, a self-interested

rational animal achieving optimal and

maximized profit, to a “homo reciprocans”, a

cooperative social human seeking order and

equality first and from that, a personal gain

which might have even more than just a

material value. Altruism must be peculiar to us

otherwise duality and paradoxes counterposing

social responsibility will bring our capitalistic

system into turmoil. “The world is of the people”

must be applied to banking, inasmuch as

financial services are economic oxygen for the

people: if only a few can breathe what will be

left of humanity? Capitalism was born just to be

about free market, not to hinder investment and

enormously enrich a few privileged.

Conventional business is purely egoist and

generates centrifugal forces that increase

inequalities, it only aims at endless maximization

of profit with too much focus on stock market

instead of shifting the gaze to incumbent

tragedies and evident social injustice. Corporate

social responsibility programs are not enough,

investment and 100% trust are the fundamental

fuel to success, development and peace. “Social

goals can replace greed as a powerful

motivational force. Social-consciousness-driven

enterprises can be formidable competitors for

the greed-based enterprises”, he stresses. When

the employee is a supported small entrepreneur

and solves social embroilment, generating an

economy based on altruism that gives back

everything as the profit is completely allocated

to social responsibility venture, peace is surely

better achieved.

Selfishness becomes selflessness to a justice

ever-demanding society. Moreover, Muhammad

Yunus’s projects are taken as a great example for

the Sustainable Development goals of UN. He also

mentions global trade: “it is like a hundred-lane

highway criss-crossing the world. If it is a free-for-

all highway, with no stoplights, speed limits, size

restrictions, or even lane markers, its surface will

be taken over by the giant trucks from the world’s

most powerful economies. Small vehicles -a

farmer’s pickup truck or Bangladesh’s bullock

carts and human-powered rickshaws- will be

forced off the highway. In order to have win-win

globalization, we must have fair traffic laws, traffic

signals, and traffic police. The rule of the fact that

the strongest takes all must be replaced by rules

that ensure that the poorest have a place on the

highway. Otherwise the global free market falls

under the control of financial imperialism, so it’s

not free anymore”.

He has been discouraged many times and his

model of microfinance might have a few

opportunity costs, economists cast doubts on the

concept of group lending and foresee a collapse.

Dr. Yunus is taken as a great example for UN

Sustainable development goals

Even the media is not helping. For instance, a

presumptuous journalist asked him in a haughty

way if he would have been the World Bank

president how he would have managed it. He

replied with an honest "I do not know but for

sure I know I would move the headquarters in

Dhaka, where the World Bank would be

surrounded by human suffering and destitution.

By living in close proximity to the problem, I

believe the Bank would solve the problem much

faster and more realistically. Dhaka is not a

choice spot for a World banker to raise children,

or to have an exciting social life, so many would

voluntarily retire or change jobs. This would help

achieve two things: on the one hand, it would

allow me to ease out those who are not

completely dedicated to fighting poverty and in

their stead, I could hire people who are

committed and who understand the problem.

And the cost of living is for sure less than that of

Washington DC”.

Education teaches to fly high like birds to those

who get to work there so they can see everything.

But it’s blurry. Yunus states that it is better to see

it worm-angle, clearly and detailed. Problems

and solutions live together. The bird, distancing

itself from the problem will never come up with

a fix. “At school, not a paragraph taught me how

to get out of a famine and protect poor people

and mindsets play strange tricks on us. We see

things the way our minds have instructed our

eyes to see. I just went out and learned about it

by myself, my simple formula is to look at what

is conventional and do the opposite. I never took

a course in banking at university and I’m in some

sort glad becaused I'm not biased”.

"...Youngsters must go back to their mothers and

learn... She might be illiterate but she does know

how to run a business, go back to her and clean

up your mind. You won’t be job ready but life

ready". In addition, work should be outdated, it is

an obsolete idea, he explains, youth must be

trained to be “creator, not seeker”; we are creative,

imaginative beings and we have entered into an

age when dreams have the best chance of coming

true and soon jobs will cease to exist for people

because AI will work for us. So we need to learn

from our mothers and let out the creativity which

resides in all of us so that everyone will be able to

do what makes them happy. The future is a world

of happy entrepreneurs.

But we undoubtedly have to roll up our sleeves, "It

is tempting to simply dump our world’s social

problems into the lap of government and say,

“Here, fix this.”But if this approach were effective,

the problems would have been solved long ago.

Their persistence makes it clear that government

alone does not provide the answer and we just

do not need charity from them. We must

cooperate for peace, happiness and wealth if we

really want this world to be ours".

Professor Yunus's words are an incentive for a lot

of experts to reflect on morality, international

policy, the Keynesian bancor and, for example, if

the citizens basic income is handled like charity or

as a true investment for growth.


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