Want to cheer yourself up during the financial crisis? Realize that the majority of the world, those who live on less than $2 per day, are so poor they don't even know there is a financial crisis! Or even better...realize that one of the most effective methods they use to pull themselves out of poverty, microcredit, and the banks such as Grameen which lend to the poor, are a closed system, not linked to our crumbling banks. Realize that we with our ties to subprime loans, credit default swaps (Which idiot came up with that financial "product"?) and Wall Street and our so-called "developed" economy, were arrogant to think we knew it all.
Muhammad Yunus, the poor, and countries which we have always considered "underdeveloped" have a lot to teach us about sustainability! A day in the life of Nobel Peace Prize winner, Banker to the Poor, and Father of Microcredit and Social Business, Muhammad Yunus, is bursting with meetings, photo ops, CEOs asking for advice, and lots of smiles all around. It is next to impossible not to smile when spending time with Muhammad Yunus.
This week in Paris, hosted by the amazingly forward thinking Philippe Lemoine of Laser Cofinoga, we were lucky to have Yunus to ourselves for a few hours, to discuss social business projects and his opinion about the financial crisis. One of the first things he did was hand me a copy of "The Seven Principles of Grameen Social Business", to clarify, once and for all, what exactly a social business is (thereby distinguishing it from those companies which try to ride the microfinance and social business wave, but have little to do with what Yunus created).
To this rock star of sustainable development, the economic future is full of opportunities! Here are Yunus' principles, which are also laid out in his excellent book, Creating a World Without Poverty: The Future of Capitalism (and ):
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 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. (My favorite!)...Do it with joy!
Yunus spoke to us about his recent trip to Germany where he met with international companies looking to create social business partnerships as Danone has done with their yogurt factory in Bangladesh. He spoke to Volkswagon about creating a very inexpensive car for poor rural villagers so that they could transport their goods. He demanded that the vehicle be green and have a motor, which is removable, so that during the rainy season, it can be used on a boat, or in a village to pump water, etc. In other words, low cost, brilliant design, which serves a social purpose. The other companies he saw agreed to do the same thing. The next Yunus installment, health care run as a social business....