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In 2006, the Norwegian committee that selects the Nobel Peace Prize winner announced that the prestigious award would go to Dr. Muhammad Yunus and the bank he founded, Grameen Bank. At that same moment, over 4,000 miles away in Bangladesh, a village woman was likely tallying up her sales for that day's work of selling pottery or mending clothes or weaving carpets.
Millions of people like her have been given the opportunity to launch their own businesses, in large part due to tiny loans which Yunus and his bank made available to them, despite those people being considered the “poorest of the poor.”
Dr. Yunus spoke to KSMU’s Jennifer Moore on a visit to Springfield this week.
Yunus said the idea of “microcredit” started out as an individual initiative: he heard from the villagers in Bangladesh that they were being chased by “loan sharks,” and could not pay their loans. He discovered that 40 people who were being chased by these “loan sharks” owed a total of 27 US dollars, which Yunus himself said he would pay.
It was so simple, he said, to make so many people happy for such a small amount of money, that he decided to try to do more of it.
“Basically, what we call now ‘microcredit’ is a loan going to the poorest people without collateral for income generating activity, particularly going to the poor women,” Yunus said.
“They pay it back in weekly installments,” he said, adding that the interest rate is low and that the loans are paid back in tiny increments.
Yunus was in Springfield this week as Missouri State University’s keynote speaker for the university’s convocation series. He spoke Tuesday night at the Juanita K. Hammons Hall for the Performing Arts on “Social Business.”
“Social business, I define in a very strict way: it’s not going beyond profit, it’s discarding profit. It’s not profit at all,” Yunus told KSMU.
“It’s where investor, the owner of the company, declares that he or she has no intention of personally benefiting from this business. The whole intention of the business is to bring out the benefit to other people exclusively,” Yunus said.
That way, you can address all of the problems a society has, he says: poverty, health care, and the environment.
A social business, Yunus said, is a company in which the whole intention is to remove a problem while putting people to work. It’s a non-loss, non-dividend company, for a social objective.
It is different from charities and non-profit organizations because those organizations often spend much of their time and resources on fundraising and tend to not sell a product or service on the market.
“Each person wants to not only have a good life for himself or herself, [but] at the same time make a contribution in changing the way the world is and feel proud that, ‘Yes, ‘I have done something while I was here on this planet,” Yunus said.
He said poverty affects everyone, whether they are rich or poor, and whether they are in a village in Bangladesh or a city in southwest Missouri. It prevents the poor from opportunity, and it limits the economy for everyone else.
Today, Grameen Bank issues loans to over 8 million people in Bangladesh, 97 percent of whom are women. It has made a difference nationwide in the poverty levels in Bangladesh, and approximately 100 other countries across the developing world have followed suit.