Interview with Muhammad Yunus : his vision of social business

Published on - August 7, 2014

Muhammad Yunus, Nobel Peace Prize (2006), sometimes called the "banker of the poor" and founder of Grameen Bank in Bangladesh, dedicated to microcredit, now chairs the Yunus Centre to raise funds and provide guidance in social business to countries in the North as in the South.

Having established structures of social business with many Western companies, Mr Yunus is convinced that his concept based on the principle of "no loss, no dividends" is a new capitalist road, more humane and balanced, a tool to help fight against unemployment. He explains this in an interview.

You propose another economic model, the "social business", a more balanced way, according to you ...
Social business is a model to promote as it combines the purpose of philanthropy to the methodology of business. Based on the principle of No loss, no dividends , its aim is not to earn money, but to solve a social problem. This principle goes against traditional business practices of pressing the base like a lemon and letting the juice going to the top, which is then soaked.

You started in Bangladesh and southern countries. How can it be an effective tool in the Nordic countries, where unemployment is soaring and where social inequalities are growing?
The concept of social business can be used worldwide. In the north and the south, everyone has problems of employment, housing... Create a social enterprise allows, for example, to give a job to five young people. Thus, the unemployed, they become entrepreneurs. The principle is applicable with 10 million people.

For several years, you have developed the "social business" with fifty Western companies. How is for them, a lever for social innovation and transformation towards a more inclusive and sustainable model?
The biggest step is to attract the interest of these groups to convince them to get into this unusual experience, where profit is not the primary motivation. These companies then discover a new source of pleasure, subtle, due to the fact to solve a social problem. Employees involved like to give meaning to their work, and so it is a retention tool. To date, none of our projects stopped.
Danone began by making a small yogurt for Bangladesh and developed [with Crédit Agricole and Amundi] the social entrepreneurship fund Danone.communities, whose field teachings irrigate the entire company. Social business seeps into the machinery of multinationals. How far will it go? I do not know.

How do we know that these experiences of "social business" with multinationals are not mere "social washing"?
Social business can of course be deviated from its original meaning. To know if it is social washing (means by which the company declare to follow a set of best practices without making them truly live) or not, we must return to the source. And two questions. Is the company working on the principle of "no loss, no dividends"? Is its action seeking to solve a social problem? If the answer is no to both questions, it is not social business .

What hope do you have that the "social business" could really grow in multinational?
This will only change if the financial markets evolve. We need to create a stock exchange with social enterprises , to assess those that solve most social problems. Indices such as the Dow Jones Sustainability World are insufficient as they are based solely on the notion of profit.
It would also require that firms produce a report not only financial, but with three important parts including the triple P (People, Planet, Profit). And not CSR reports written by advertising agencies! Similarly, business plans must also include these three axes.

What other advice would you give to companies who want to try this?
Start a small social business on the sidelines of the reactor heart of the company. Watch what happens, and if it boosts your creative power. If successful, you will measure how the applause will be fed more than the usual mere financial gain. You have done a small thing, but people will remember you.

You have participated to the success of microcredit. Can you give us some figures?
We have come a long way in thirty years: 160 million people worldwide have access to microcredit. Grameen Bank started with $27 and now lend to 1.5 billion to 8.5 million borrowers - 97% of women. The money comes from the country, and the bank is controlled by the client. The profits of the bank return to shareholders, loans are granted to children of clients to finance their education and allow them to start their own social business .

Link - http://www.microworld.org/en/news-from-the-field/article/interview-muhammad-yunus-his-vision-social-business