'Social business' key to reducing poverty: Nobel laureate Yunus
By Kishor Kumar Poudel
|Nobel Laureate Yunus
Nobel Laureate Prof. Muhammad Yunus of Bangladesh has said that "social business" could bring big social changes, helping reduce poverty in a country like Nepal.
A campaigner of the ''micro-credit', which is considered as a great engine to reducing poverty worldwide, Yunus urged the policy makers, planners and the private sector to institutionalise 'social business'.
Speaking at a seminar in Kathmandu as keynote speaker on 'Microfinance and Social Business' organised by Rural Microfinance Development Centre (RMDC) and Confederation of Nepalese Industries (CNI) Friday, the 2006 Nobel Peace Prize winner Yunus also claimed that ommon citizens have unlimited capacity to resolve the problems prevailing in the society on their own, more effectively than the government.
He also claimed that Grameen Bank in Bangladesh has been doing a lot of work for poverty reduction than the government.
According to him, funds allocated by the different corporate houses, companies as the corporate social responsibility can be used into the 'social business'.
The social business funds can be invested to the poor people, not like charity money that hardly produces returns. Social business funds will come back as cycling system, he explained.
Mentioning that only a good system can bring about changes in society, Yunus, a recipient of more than two dozens honorary degree from different countries, suggested financial institutions not to centre on city area but also to reach out to the poor people.
Grameen Bank established by Yunus provides education loans to the students and these loans are raised from students after their jobs are secured.
Yunus also urged Prime Minister Baburam Bhattarai who was present on the occasion, to make finance accessible to everybody by changing the current system and policies.
After success of his micro-credit and micro-finance model, he has invented the new model 'social business' to harness the
entrepreneurial spirit to empower poor people and alleviate poverty.
Prof. Yunus, 72, obtained his PhD in economics from Vanderbilt University in the United States in 1971.
During the visit to the poorest households in the village of Jobra near Chittagong in 1976, Yunus discovered that very small loans could make a disproportionate difference to a poor person.
His first loan, consisting of US$27.00 from his own pocket, was provided to 42 women in the village, who made a net profit of US$0.02 each on the loan.
Yunus succeeded in securing a loan from the government's Janata Bank to lend it to the poor in Jobra in December 1976 and was renamed the Grameen Bank (Village Bank) to make loans to poor Bangladeshis.
As of July 2007, Grameen Bank has issued US$ 6.38 billion to 7.4 million borrowers. To ensure repayment, the bank uses a system of "solidarity groups". These small informal groups apply together for loans and its members act as co-guarantors of repayment and support one another's efforts at economic self-advancement.
The success of the Grameen model of microfinancing has inspired similar efforts in a hundred countries throughout the developing world and even in industrialized nations, including the United States.
As per statistics at the Rural Microfinance Development Centre (RMDC) of Nepal, microfinance has reached out to 1.8 million households across the country. The Nepal Microfinance Vision 2015 has targeted to reach out to 3.22 million households by the end of 2015.
Prof. Yunus was awarded Nobel Peace Prize in 2006, along with Grameen Bank, for their efforts to create economic and social development. nepalnews.com