How social business can create a world without poverty
We need 'social business' to couple the human heart to the capitalist system.
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Social businesses could be viewed akin to investment accounts, where the money is returned over time but the interest is paid in social dividends, rather than in economic profit.Skip to next paragraph
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Bottom line: affect on society
While both personal entrepreneurship and social businesses need to be profitable, the bottom line for a social business is how much impact it makes on society,not how much money it returns to the investors. This represents an opportunity for the extension of capitalism to meet the social needs that are not currently met.
As an investor in a social business, I expect my investment money to come back to me, but the real reason for my investment is to see that it benefits society, as opposed to my pocketbook.
A profit-maximizing business owned by the poor can be considered a social business. The Grameen Bank is an example of a social business that is both owned by its poor borrowers and that seeks to maximize the benefits for those borrowers.
Groupe Danone produces and distributes Danone yogurt and Evian bottled water throughout the world. The mission of Grameen Danone Foods is to manufacture nutrient-rich, fortified yogurt in small local plants that minimize the need for expensive refrigeration and to sell it at a low price to improve the diets of rural children in Bangladesh.
By investing in this joint venture with Grameen Group, Groupe Danone can help to eradicate malnutrition in Bangladesh, one of the least developed countries in the world, by doing business, not by simply donating the money.
The experiment is a win-win situation and the first of many multinational social businesses that Grameen would like to partner.
The current capitalist framework does not allow us to fully mobilize mankind's will to do good.
Tap into the urge to do good
Because we are creatures who are motivated to solve the problems of the world, we need to add a new component. Capitalism has the capacity to do good in the world, provided we recognize that the motivation for the entrepreneur need not be exclusively economic and personal.
The urge to do good exists in all of us – right along with self-interest. We can harness that urge to do good in addition to human ingenuity to help the world's poor become self-sustaining with dignity and self-respect.
Thirty-one years ago, when I launched the Grameen microcredit program, no one in the banking world thought low-cost loans for poor people would be viable on a large scale. I was not sure myself how large it could grow.
Just as microcredit has proved to be a success, so, too, can social business. Working together, we can expand the predominant view of capitalism and enterprise to include social business.
This new perspective will move us one step closer to bringing all people into prosperity, and one step closer to a world without poverty.
• Muhammad Yunus is the founder and managing director of Grameen Bank and the author of "Creating a World WithoutPoverty: Social Business and the Future of Capitalism." He won the Nobel Peace Prize in 2006 for his work on microcredit.