I’ve had the opportunity to meet Dr. Muhammad Yunus today, the pioneer of microcredit and microfinance and the founder of Grameen Bank. He was at the Asian Institute of Management (AIM) where he held a talk and launch of his latest book titled “A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions“.
One of my fondest discoveries is that Dr. Yunus started out as a research assistant like myself. From thereon, he went to lead various initiatives and became part of several organizations that are impact-driven. After his talk and book launch, he revealed that they are planning to establish the Yunus Social Business Center in AIM – my eyes and ears sparkled.
Dr. Yunus is no stranger to the Philippines. He was involved with the International Rice Research Institute, where he was part of the Board of Trustees in a few years. He was also awarded the Ramon Magsaysay Award in 1984, and was given the status “Adopted Son of Negros Occidental” in 1992. During one part of the talk, he empathized with the Filipinos in the room, citing the infamous ‘5-6’ lending.
Needless to say, he is a man well-versed with the economics and dynamics not only of the Philippines, but the whole world.
If I had one key takeaway from his journey, it’s that the capitalist system must shift towards being social impact-driven. This was the consistent tone of his talk – that if we were to change the narrative and practice of the current capitalist system that has consistently pushed for profit maximization, then we may have a better chance of ‘saving the world’.
He goes on to explain that the current system has had several failures already that we need to overhaul its design to something that is more attuned and sensitive to present global challenges. In his book, these challenges were cited such as poverty, unemployment, and carbon emissions. This seems like a gargantuan task – so what should we do?
His main proposition: invest in and create social businesses.
Grameen Bank is one of the best examples of a social business. It is a ‘bank for the poor’ that was founded by Dr. Yunus. This bank pioneered the microfinance movement, which is now being applied by different initiatives across the world.
Grameen Bank provides small loans or “microcredit” to impoverished communities without the need for collateral. To be able to pay off the debt, the bank provides opportunities to the borrowers to create their own business ventures – these ventures would later provide earnings to these communities that will allow them to settle the debt. This was the basic working model of the bank.
Essentially, social businesses, unlike traditional businesses, are focused on solving problems. Whether that would be a social, economic, or environmental issue, social businesses are game changers in the business landscape. Today, the definition of social business is still highly contested, but ultimately, they are businesses that focus on solving problems or voids in society that remain untapped.
Some people may ask – don’t traditional business also solve problems? Yes, that is true.
But what makes social businesses different is that they focus on systemic problems or issues that bigger, more traditional firms can’t address due to different and convoluted priorities. For instance, can you expect a big firm in consumer goods to immediately tackle the plastic waste they are causing? No, because they have other problems to deal with. The bigger firms’ lack of capacity to address these issues make these issues “voids” or “gaps” that need to be addressed through solutions like business. This is where social businesses come in.
What if, for instance, there was a social business focused on addressing the plastic waste being caused by the big firms in the consumer goods sector?
There are a lot of ways that social businesses can come in and fill these voids and gaps. With visionaries like Dr. Yunus, it becomes clearer and more possible for us to help fill those gaps.
To make matters more urgent, we have 11 more years till 2030 comes – the year that the initiative of the United Nations’ Sustainable Development Goals would come to an end. By then, how far would we have come? Would it lead to the creation of another set of goals? Would we breach the 2 degrees Celsius mark we set for ourselves on climate change?
We’ll never know unless we try.
Let’s take the conversation forward. Find out how we can collaborate for a sustainable future: https://berdeboy.blog/collaborate/