At NSRCEL-hosted talk at IIMB, the Nobel Laureate describes the challenges and rewards in building and scaling social businesses
09 February, 2017, Bengaluru: “When you take off your money-making glasses and wear the social business glasses, you can see much more and make anything happen with your creativity,” declared Nobel Laureate Prof Muhammad Yunus, during his talk on ‘Building Bridges – Social and Capital’ at IIM Bangalore on February 8 (Wednesday), 2017.
The talk was hosted by NS Raghavan Centre for Entrepreneurial Learning (NSRCEL) at IIMB, under its initiative ‘NSRCEL Social’. Through ‘NSRCEL Social’, with the support of the Michael and Susan Dell Foundation, NSRCEL is extending support to social impact not-for-profit ventures, to leverage its experience of nurturing early-stage ventures to build successful social ventures.
Describing his own journey as “unplanned”, Prof. Yunus spoke about how he quit his job as an academic in the United States to return to Bangladesh and teach at Chittagong University. He said Bangladesh’s devastating economic condition after its independence in 1971 and the famine in 1974 resulted in utter misery for his countrymen, which made him think that his qualifications in Economics were meaningless if he couldn’t help his countrymen. “Although the country had beautiful land, it was mostly barren.” As water was a problem, he negotiated with the government to set up deep tube wells, then took measures to manage the same. “We had to source fertilizers and seeds. So, we launched the ‘three-share program’, wherein the profits of harvest were divided by the share-croppers, the land owners and a committee formed to facilitate these initiatives.”
When he realized that the poor continued to be at the mercy of loan sharks, he said he started lending money himself until he ran out of funds! He went to the banks, he recalled, but they refused to lend money to the poor as they were not considered credit-worthy. But when he offered to be the guarantor himself, the banks agreed. That was how, in 1983, the idea of Grameen Bank was born, he said. In 2006, Prof. Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize.
His next challenge was to bring women on board and he credited his army of women students for achieving the seemingly impossible feat. “Women would say, ‘I have never handled money’. Just know it is not her voice, it is the voice of history. We need to peel off the layers of history”, he told those working with him to involve women.
His bold move made his team unpopular. “We had to calm the men down. We took sessions with the women on how to borrow money, protect money and make it grow, while protecting their family life as well. Today, we have over 9 million borrowers, and 97% of our borrowers are women. Women are on our board and decide policy,” he explained.
When he was told that women would not be entrepreneurs, he had a solution for that too. “From problem-solvers, women had become order-takers, and we aimed to change that. We gave education loans to the first generation of women borrowers so that there could be 100% literacy among the second generation, who then went on to become professionals. When they complained about scarcity of jobs, we told them to become job creators and not job seekers and gave them social business ideas and created social business funds for businesses to solve problems. We became investors for people who came with such business ideas and we have created many such businesses. No business proposal is rejected – they are reviewed, approved and we become partners. Today, there are over 12000 young people running businesses. Grameen Bank is not just a bank, it is a mission-driven social organization.”
Describing, in detail, his dream, to the audience, he said: “I dream of an economy that can be shared by everybody. We need to get out of greed-based civilization and create a society of human capability and caring and sharing. We aspire for action-oriented economics, where capital flows to every part of the society.”
The later part of the evening saw Professor Sourav Mukherji, Dean of Academic Programmes at IIMB, and Santosh Ramdoss, Program Officer, Michael & Susan Dell Foundation, joining in the conversation with Prof. Muhammad Yunus.
During the Q&A session, he advised a young entrepreneur who complained that many of her employees, after she thoroughly trained them, left her firm, to take them as partners. He urged the youngsters in the room to unleash their creativity. “You are lucky to be in this day and age, in this great institution and in this city of Bangalore, which is the world capital of technology and unlimited opportunities. You have the power to change the entire world. The point is: are you aware of it?”
About the speaker: Prof. Muhammad Yunus is a globally recognized authority on evolving sustainable social business models. He is a social entrepreneur, banker, economist, and civil society leader who was awarded the Nobel Peace Prize for founding the Grameen Bank and pioneering the concepts of microcredit and microfinance. He has received several other national and international honours. He is a member of the Board of the United Nations Foundation. He has also served on the Global Commission of Women's Health, the Advisory Council for Sustainable Economic Development and the UN Expert Group on Women and Finance.
About NSRCEL Social: NSRCEL Social seeks to address the lack of an effective support system for early stage non-profit organizations. The non-profit incubator will select and nurture early-stage organizations over the next two years, helping them become world-class non-profits that deliver impact. The incubator is guided by an advisory committee comprising established non-profit and business leaders and faculty of IIM Bangalore.