Nobel Prize winner Professor Muhammad Yunus, founder of the Grameen Bank has called for an urgent redesign of the world’s financial systems and a major shift to a more “inclusive” banking system through microcredit and “social business”. Professor Yunus delivered the Inaugural Ashden Awards Lecture to over 400 people at the Royal Geographical Society last Thursday night.
The Grameen Bank has spread microfinance to over 7 million people, offering small loans without collateral to transform the lives of poor women in Bangladesh . To date the bank has loaned over $7 billion and 99 percent of those loans are paid back. The approach has spread throughout the world, even to New York and is soon coming to Glasgow .
Responding to the global financial crisis, Professor Yunus described it as an opportunity to bring about fundamental change:
“The financial, environmental and food crises are all interrelated and are all driven by selfishness. We must seize this opportunity to come up with an alternative financial system, based on trust and selflessness. The poor are suffering from financial apartheid. They make up two-thirds of the world’s population but are currently excluded from the system. The real issue is not whether the poor are credit-worthy but whether banks are people worthy” said Professor Yunus.
Grameen now has over 30 microcredit enterprises covering solar energy, mobile phones, water, health and many others, all driven by social motives. One of these is Grameen Shakti, last year’s winner of the Ashden Outstanding Achievement Award for its remarkable work installing solar home systems, biogas plants and improved stoves across Bangladesh .
“While the financial world collapses all around us, our schemes are thriving - so who is really credit worthy?” he remarked.
Professor Yunus’ lecture also set out his “social business” approach described in his recent book, Creating a World Without Poverty: Social Business and the Future of Capitalism where he calls for the creation of new businesses that are not founded on the profit motive, but on the motive to help others.
Giving the example of a new collaboration with multinational company Danone to provide micronutrient-rich yoghurt to poor, malnourished children in Bangladesh , he said, “Every problem can be turned into a social business essentially. Each one is the development of a seed, and it can be replicated to change the world instead of to make money.”
Sarah Butler-Sloss, Executive Chair of the Ashden Awards for Sustainable Energy said, “Professor Yunus is an incredible inspiration. We are seeing many of our winners applying his microfinance approach to sustainable energy and lifting people in their communities out of poverty. We are immensely proud to be working with Professor Yunus and his colleagues and commend his awe inspiring achievements.”
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