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Flow Toplines: This page surveys business schools who could collaborate with Yunus SMBA and samples searches of deepest transcripts with Dr Yunus rsvp washington dc bureau 301 881 1655
-special collaboration invitation for 2009 support please help catalogue advice for Presient Obama from the world's most trusted free marketers of ending poverty: eg1 the president can declare the date for zero poverty in the whole world at the same time encourage the united states to set their date when their city be zero poverty when their county gets to zero poverty are never going back- city by city, county by county, state by state, it can be done and it will encourage everyone else – ..that state can do it, we can do it

this is the way to go, so poverty will be the challenge –and once you have solved poverty other solutions come right away, environment will come right away

Survey of Schools with Potential Collaboration Content for SMBA (definitions 1 2) now appears near bottom of this page after 2008's year of transcripts uniting Yes We Can Rich world youth and Microcredit we can poor world developing economists practiced around exponentials of community rising

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1 yunus popgroup empowerment album due spring 09 : I-care & Eyecare

ref - video 2 : aravind/brilliant eyecare social business
.Nobel speech on innovation of social business model resolves every broken community system : poverty, loss of healthcare, irrelevant education, drowning in carbon, media not sharing technology with poorest...
.intercitizen networks of collaboration cafe "yes we can": cable tv transmission from lehman university (the bronx location where UN was born)

SMBA course replicators are desperately seeking breakthrough modules : micro-up: collaboration; exponential purposeful (community goodwill multiplying) futures metric beyond last quarter's extraction of profit; mail with ideas for other resources found or lost


LA Booktour Conversation Jan08 podcast:

Rick Wartzman, Director Drucker Institute Claremont & Muhammad Yunus, Grameen

I want to talk quite a bit tonight about your new book (title) and this idea ‘social business” as a way that might put poverty where it belongs – as you say a museum. But this concept really grew out of your whole development of microcredit and Grameen’s work – so I want to start with that foundation. What is microcredit all about? Why not tell us what size of loans grameen  makes and what the loans are for


Microcredit are loans for people who never get a loan from a conventional bank. Another way to look at it is for the poorest people, without collateral with any legal papers or anything for income generating activity and which is repaid in small installments weekly or fortnightly. Usually it will be starting from anywhere, it could be as small as $1 – as my story goes it started with $27 given to 42 people. Even today after 31 years of our work, we have loans that start at $10 or 15. It could be bigger as we go along: the average right now at Grameen Bank is $150. We lend out over half a billion dollars a year to over 7 million borrowers

RW and what are these loans typically used for- you talked about income generating activity – what does that mean?


Meaning anything that will make you earn some money. Our borrowers – 97% are women. So we are a very women-focused program. The poorest women get in almost – almost destitute. The only thing she may be familiar with is raising a few chicken : selling eggs so that would be her enterprise – or processing paddy. Buy the paddy from the market, pound them and make clean rice and sell it. She knows how to do it and immediately she gets an income. This is another familiar thing. If she is bold enough she will buy a cow, sell milk and pay back the loan and become owner of assets.

RW To get to the punchline, can you talk about the dramatic difference these loans have made in the aggregate. You have lifted lots of people out of poverty – what do the numbers look like?

MY Well I haven’t lifted anyone out of poverty!  People lifted themselves out of poverty. We try to keep track of the situation so far as her income is concerned and how many of borrowers are getting out of poverty. This is an annual routine. 2006’s figure is the borrowers that have been with Grameen Bank for 5 years or more – 64% of them have crossed over the poverty line.

 So each year each day each month, more and more are coming out. There are World Bank studies that are done multi-year, multimillion dollar research focused on Grameen Bank’s performance and impact of the people – they tell that on average 5% of Grameen borrowers get out of poverty every year. So that’s another way of looking at it.

 Besides we also see whether the children are going to school – so one of he things we tried to encourage right from the beginning : to send the children to school. Because these are all illiterate people, the women who join Grameen Bank are illiterate, their parents are illiterate , their husbands are illiterate. But we wanted to make sure that the generation that will come out after they joined Grameen Bank are literate and go to school. That has happened. Nearly 100% of the children of Grameen families are at school. And many of them are in higher education now. We have encouraged them with scholarships and we give them student loans. Right now there are more than 21000 students in medical schools, engineering schools, universities – several of them have PHDs. So this is an amazing generation coming up from totally illiterate families – families where literacy never entered ever in history.  Now we have a completely different generation  - a new generation  coming up . So this is one aspect  also, not only the income goes up but you create a new generation where the cycle of poverty will not continue as it has been over the years

RW So the catalytic effect of these loans, what it allows people and generations to do- one more bigger picture to talk about is what has it done in terms of overall poverty rate of Bangladesh ..?

MY Bangladesh was known when it was born as a basket case. This country would never make it and get out of rut it was in. It was identified as the poorest country in the world. But poverty has been declining steadily in Bangladesh. It declined on average of 1% year during the whole decade on 1990s – so  10% in the nineties. In the first 5 tears of 2000, the poverty has declined at 2% a year – so at that rate if we continue Bangladesh is right on the track to achieve the millennium development goal  to reduce poverty by half by 2015; but our expectation is that the rate of decline in poverty will be faster than 2% as we go along , so if it becomes faster then we will be reaching millennium goal before 2015.  So that is very exiting thing for us.

RW Grameen has done its banking part while running a successful business – on business terms yes?

MY Again Grameen is owned by the borrowers – meaning that these women who are taking loans from Grameen Bank, they are the owners of the Grameen bank. With the 31 years of the work, only the initial 3 years the bank lost money. Ever since we have always earned profit  so we have no problem of making profit– and profit goes back to the borrowers

RW And you have stopped taking any outside donation?

MY Yes that’s right. We began with our own money. We had never taken money from outside,. First it started with a little money from my pocket. And then I became a guarantor to the banks – i was signing papers, taking risk, taking money from the banks, giving it to the people, and offered myself to help facilitate getting ,money to the bank. So that period continued until 1982

We began in 1976 – so the first 6 years there was no external money or anything. Only in 1982, one agency IFA Intl Fund for Agriculture & Development – they insisted we should take some money. We said we don’t need money – we have plenty of money. But they said we want to participate – its such a great idea what you are doing- so at their insistence we took some money. So that was the beginning of us taking  money from outside. And since them we have taken external money from NORAD, SIDA, CIDA, KfW, ... – then in 1995 we decided not to take money from anybody. And since then we haven’t taken money from anybody because there is plenty of money within the bank because the bank takes deposits – and it lends the money to the people. Each branch actually is independent financially. It doesn’t borrow from head office or another branch, it just mobilises deposits and lends money to the poor people in the same locality. It’s local money going to local poor people and building the local economy

RW Which means that people are not defaulting – they are paying on time regularly – you have a great repayment record?

MY yes our repayment record has always been good – not only Grameen repayment record has been good but wherever microcredit idea goes over the world- repayment is absolutely not a complaint. Its amazing because there is no collateral, no guarantee, no legal papers, and so on but still people pay back

RW and I want to come back to that point as i think it is really crucial and defies a lot of assumptions that people made originally about how the poor would behave

MY not only the poor will behave anyone will behave!

RW yes , I think there were stereotypes

MY look at what happened to subprime!

RW well yes exactly , exactly they could use Grameen’s skill for sure

RW This is a good place to go back to the beginning. It is 1974 – Your home country has fallen into the grips= of a terrible famine, brought on by some natural disasters and the war for independence. You were  teaching economics at the time- but seeing a very different economic reality outside the university’s gates from what you were telling your students in the classroom. Could you tell us a bit about that disconnect?

MY You see the reality of life is so different than the classroom where you have all the elegant theories: every economic problem has beautiful solutions. But you walk out and people are dying of hunger. There are many many ways of dying but the dying of hunger is very unusual because death comes at a very slow pace- each day you are inching towards death and nothing can be done. Other people are eating, enjoying but some people are dying – this is an amazing situation. In that situation, you feel kind of empty, impotent, useless person- you cant be of help to anybody. So I was trying to get out of that feeling that I had- so I thought maybe I don’t know what to do with this whole big problem but I can at least try, try on one person if I can be of some help to one person – that is something I feel comfortable if I  have done something at least for one person. So that’s what  I was doing in the village going round talking to people trying to do something. And then I see the problems of loan sharks- and I try to make the list of people borrowing from the loan sharks

RW Tell me you first met this woman Sofia Begum – tell me her story

MY  She was making bamboo stool. As I walking buy in the village, I saw these beautiful bamboo stools and the woman making them. And the contrast between the beautiful stools and the tattered clothes and the rundown shack behind her – it didn’t match. So I was wondering what happened to her. So I tried t talk to her – it is not easy to talk a woman as a stranger I came form the outside. So anyway I tried to make it easy for her to talk – in the conversation I found that she only made 2 pennies a day. I couldnt believe why anybody should make only 2 pennies a day making such beautiful stools. I tried to make some notes on how much money she spent on making things – I thought she didn’t understand  – but after I had  made the records 2 pennies was still the result, that’s what she gets. Because she didn’t have the money to buy the bamboo, so she had to go to a trade to borrow money from., and the money she needed to buy the bamboo was 25 cents. So the trader gave her money but the condition was whatever she makes she has to sell it to him, and he decides at what price he will buy. So I said this is a situation of converting someone into slave labour, she is really a slave labour. All these transactions sound like business- but are actually something else. So that’s what pushed me to looking into moneylending in the village

RW This was I think a 22 cent loan you made to her as an initial loan .And then you surveyed the rest of the village to see who was using moneylenders. And this is where you found the 40 some people and it took $27 in loans to break this cyvcle

MY Yes

RW Amazing. Its hard for us – I think for me and people sitting out there – to wrap our minds around te depth of poverty you are talking about in a place like Bangladesh and much of the developing world- I mean read about half the world living on $2 a day and a billion people living n $1 day or less. I cant fathom what that means – can you talk about what life is really like in a village – first in the absence of microcredit and then what difference microcredit makes if people can start to lift themselves in terms of amount food, they can get, what kinds of things they eat , the rhythm and what their life is like

MY One way to look at this is that Bangladesh has right mow 150 mn people , when we started we had 75 million people.

RW and this in the area the size of Wisconsin

MY Yes. ..At the start, not many people could own land because its in short supply. Half of the population were landless people. So if you didnt have land, you don’t have a livelihood really because the land provides you the food and you can take care of yourself. Those who do not have land; they have to find other sources of income. So the employment didn’t have that much opportunity for half of the population for the country


So their only survival is whatever odd jobs they could do –and that’s the only way they cold survive- very seasonal agricultural jobs. So life was extremely difficult- so what we tried to do was instead of sitting around see if we could get a little money to start self-employment which we supported with credit –so that we lend money to create your own income generating opportunity. And move on from there – if you are successful in that you can move on hiring other people and start a business

RW You write both in banker for the Poor and in your new book very passionately, and I think persuasively, about the wrong headed assumptions that lots of development officials make in places like the world bank and those running traditional anti-poverty programs that government officials make that most economists make – we were joking today that Peter Drucker (whose work I am involved with) in all recorded history there has not been one economist who had to worry about where there next meal would  come from . I think that’s something you could relate to. Tell us about some of what you call economic blindspots and why they have been so counter-productive in tackling global poverty. We have touched on one that the poor are a bad credit liability - that has certainly proven to be untrue. What else have you run up against as

assumptions that are backward or just wrong?

MY The traditional way poverty is looked at – you create jobs, if you create jobs then poverty will be taken care of. So the question is how do you create jobs. The only way they could think of creating jobs is building infrastructure – investing in highways etc. So world bank and others specialise in infrastructure , big projects –hoping that these projects will build the economy, a lot jobs will be created and the poor will be moved out of poverty. So they singlemindedly pursued that kind of policy, even today they pursue the same policy creating a structural environment but there they don’t look at the people. This is known as trickle down theory you build an economy that gradually reaches down to the poor but in reality the economy moves in a different direction. It is the top people who gain, not the poor people, from the economy moving. They become richer and richer but it doesn’t flow into the poor people. This is the kind of thing that is happening in China right now; China is moving very fast 10-12 %. The top is moving up, the poor moving down, the income gap is getting bigger

RW I know another area that has been pursued a lot and has been a traditional area that has been pursued in this country is jobs training and skill training, and I know you are not a big believer in that. Tell us why

MY Many of the poverty programs look as poverty as part of the work because they assume people are poor because they don’t know what to do, so you have to tell them, train them how to do things. So you come up with great ideas on training this or training that. In most of the cases people go to this training programs, not because they need the skill but because  most training programs also come with some financial benefit –some kind of daily allowance. So people come to pick up the daily allowance. It doesn’t matter what you are teaching them , and they have no use for whatever they have been taught. So you go home and nothing changes because it is not followed up  with something to be supported - by a credit facility  or marketing facility or whatever. So just assuming that you train them and somehow they will change their lives, it doesn’t work out. In contrast, our work started out by saying that people have an enormous amount of idle capacity. They already know what to do but they don’t have a opportunity to translate it to work because the financing isn’t possible. Just this example of the lady who is making the bamboo stool – she knows what to do but she doesn’t have the money to do it. And someone else took advantage of her situation and made the money himself instead of letting her make the money. Many of the things that you see around done are done by poor people . Just one familiar example =- a repair man who repairs car, equipment , ... he know his job very well but the repair shop is not owned by him.. He works for the repair shop and the shop attracts customers because he is there. But the guy who owns the repair shop doesnt know a thing about the equipment, all he does he has the money, runs it, so the profit comes to him. So if this repairman, if he had some money, some sources of financing if he had gone for himself he would have made money himself, but just because he doesn’t have the money he cannot do it.  Many of the taxi cab drivers don’t own the taxis, it is the owner of the taxi that makes the money.. In Bangladesh if you go to Dhaka City you will see hundreds and thousands of rickshaws on the street. It s a very simple gadget – 3-wheeler rickshaw, it costs very little. But the rickshaw puller is not the rickshaw owner. Some guys somewhere owns the rickshaw, the puller is just a daily labourer, he makes a little money out of it and the income goes to someone else. Or he rents the rickshaw, where he has to pay a lot until he has earned enough to pay the rent, he can not touch any of the money, so only above the rent he has to pay, that’s his income. But if someone had financed him to buy the rickshaw the entire income would have come to him, instead of giving it to someone else to pay the rent he could pay back the loan and the rickshaw would be his. So this is how the ability is there ,but he cannot make use of it for his own benefit

RW Why credit should be a human right as you put it ... you are a big believer that women more than men make the best borrowers at least for Grameen and your strategy

MY we had a little controversy with the conventional bankers when i was trying to persuade them to lend money to the poor people. I was arguing with them about 2 things: 1) they were unjust because they refused to lend to poor people,  2) another complaint was that conventional banks rejected women. As evidence I was showing the figures of the borrowers they had -not even 1% were women. SO I said there is something wrong in your system,. So when I began I wanted to make sure that half the borrowers in my work were women because I had been complaining about that issue a lot. When I went to the women  to persuade her to take money she said no: dont give it to me . Give it to my husband, because I don’t know anything about money- literally she hadn’t used money for anything so she doesn’t have any confidence in that. So it took us a lot of effort to build confidence in the women to take the money. And finally after 6 years of our work, we made it to 50 50. then we noticed that the money that goes to the women benefits the family more than the same amount of money going through men

RW why is that it

MY Women have a lot of features which at time I though was Bangladeshi but it is basically universal.. Women paid lot more attention to the children in the family than men do. So this is one finding very clearly demonstrated in our work – for example poor families as a coping mechanism, if they cannot feed all the children in the family they give away the children to other better off families so they can work there, they can be fed by those families in exchange for their work. So they become a kind of slave labour themselves- they work day and night just for food. When a mother takes a loan and starts earning some money, you see in that house these kids start coming back but you dont see that when the father is the borrower. So you can see the difference of the attitude of the mother to the children and the father. Also if you look at the way woman behaves, when she makes extra money and income from the work she is doing, if you look at who should she direct her attention to with this money that she got – if you  make a list it will start always with children , children becomes first beneficiary of whatever she earns, then household, the  others and so on and if you see whether she is in the list herself – probably she will be the last item on the list, But if you look at the men’s list it will start with him, and goes down the other way. It’s a kind of quality of self-sacrifice that is built into woman unlike men; men doesn’t behave the way woman behaves. Even the way money is used after it is received. Traditionally, when a man receives a wage cheque the first thing he does is  go to the pub , enjoys himself. In the same situation women don’t do that.

Also women have a longer vision of some kind to get out of poverty. Men were more casual about it, men didn’t think about tomorrow, they more enjoying today.  Women wanted to get out of the situation  because poverty weighs much more heavily on the woman in the same family as it does on man. So women wanted to get out of situation as fast as she could and she wants to build up something, she is looking forward to reach some place which you don’t see in men. So seeing all these things coming up, we changed out policy and asked ourself what’s so good about 50 50, and focused more on women – as a result we now have 97% women

RW Does microcredit have a role in the US – eg New Orleans after Katrina, and if so why hasnt it caught on more here? Are there institutional barriers

MY Katrina is a disaster situation so of course you need all the help you can get, and microcredit can be very helpful in building houses and livelihoods all over again. But in general if you look at the US situation, millions of people in this country dont have bank accounts because bank will not accept your account because you are too small. They dont want to handle small accounts, so you are out

RW Payday loan racket?

MY Yeah. And if you receive your cheque from your employer and if you want to cash it you cant put in your account and get the money because you dont have a bank account. You go somewhere else , and that’s why you have the cheque cashing companies all over the country and they rip you off. Even a government cheque which is as good as money,you  cant get $1000 dollar cheque, you get much less because somebody else makes money. So you need something – this is a microcredit situation meaning that the banks don’t give you the service- you have to find another way of building that banking. And the payday loans you just mentioned, you need a small amount money between your two payday cheques- nobody will give it to you so you go to the payday people who will charge you an enormous interest, typically 40%. And you see pawn shops everywhere, huge big signs in any big city. So this indicates the system doesnt work at the bottom, very clearly very loudly, boldly but nobody notices because those who matter they  have their bank accounts so they dont have to pay attention to it. This in the richest country in the world, the most sophisticated banking system – for whom, millions of people dont get to it.

RW But there are some problems with microcredit , why it doesnt take off here? institutional barriers about deposits?

MY  What I would say that microcredit problems operating in the States have problems because they are not allowed to take deposits – because NGOs are not supposed to take deposits. This is the same law everywhere not just the USA. So you need to have a banking license,  a new banking law to create microcredit banks. People say why dont you take the usual banking law and create a bank and lend money to the poor people. My point is yes you can do that but to create a bank in the USA you need a huge lot of capital requirement that is buitt into the law itself. So the conventional bank is like a supertanker , it can go into deep sea carry lots of cargo that’s a huge thing, but microcredit is like a dingy boat! It goes into shallow water. So if with the architecture of a supertanker you build a dingy boat , it wont work , it wont float, it will go down. You need a new architecture. You need new piece of legislation so this can be done.

Then another problem is the welfare law. Welfare law extends right into the middle of it. You cannot lend money to a welfare recipient – these are the people you want to reach, so that they can get out of welfare. But the law says no way you can’t do that. The law requires that if the welfare recipient earns a dollar, he has to report it to the welfare authority so that the dollar will de deducted. Its a funny law- you are supposed to encourage people to earn money when you are on welfare so you get out of welfare. But the law is made in such a way that they want to keep you there, they have no interest in getting you out

RW Let’s move on to your broader concept of social business – Grameen has expanded  is much more than a bank now – you have expanded into a network of 26 companies, is that right?  Gotten into all kinds of things: Healthcare , education , fish farms. fabrics – there is one venture that I think is particularly interesting because it underscores the importance of info technology  and its power in helping the poor lift themselves out of poverty and that is Grameen Telecom – could you touch on what that company is about and has been able to achieve

MY I was very enthusiastic supporter of bring information technology to the poor people. I was arguing that microcredit was very important to poor people to change their life because it creates income , creates their saving habits and so on. At the same time the new technology that is flooding the world and changing the whole world could be very effective for changing poor peoples lives if we could bring the technology to the poor people in the right manner. While I was arguing that I had no way I could demonstrate it, and really test it out.  One opportunity came when the government of Bangladesh was issuing licenses for private companies to provide cell phone service. So we applied we thought why not, let’s apply for a cell phone licenee and we will cerate a new company. So we applied  and called our company Grameen phone. Our idea was to bring cell phone in the rural areas because at that time when we applied the only telephones you had for the city, and then only half a million phones in the whole country. So we will create this cellphone company and bring the cellphones to the villages, and give loans to Grameen borrowers to buy herself a cellphone and sell the service of the cell phone and she will make money. Everybody said this is crazy.  These women never saw a telephone in their life ...who she’s go to call!

RW  Ha! Again a lot of assumptions – right! So who she call?

MY So I was trying to convince them I am not doing it for her to call someone. I am creating it so that others will need to come to her as she’s the one with the phone.  And she will make money This will be her new cow!, her cash cow! Nobody believed that!  Anyway finally we got license and started the work in 1997, and immediately it became a big success. It became a roaring success for Grameen borrowers to have a telephone- once you have a telephone you get out of poverty in a couple of years. Absolutely guaranteed because you make so much money renting out the telephone. The telephone service expanded very rapidly because of people’s eagerness to communicate. Today Grameen phone is the largest cell phone in the country – it has over 17 million subscribers.

RW You were told you would sell about 250,000 telephones- that’s what all the experts predicted?

MY Yes when a consultant was hired to estimate its potential – he estimated 250,000 subscribers by 2005. In reality we reached 8 million by that time – so that’s the kind of consultant’s imagination. So today Grameen phone is very successful, telephone is everywhere, and also today Grameen telephone is also the largest taxpayer in the whole country so you can imagine how big the company is

RW Fantastic – so let’s talk about social business- what is a social business and how is it distinguished from  this whole notion of Corporate Social Responsibility -what’s different about your idea?

MY The idea i was arguing for is : now in economic theory  you have only type of business- business to make money, and the mission of this business is to maximise profit. That’s what the theory talks about – there is no other kind of business in the whole world. The first objection i had that theoreticians that built this theory had assumed that all human beings are some kind of money making machines . Otherwise, you wouldn’t have only that theory

RW One dimensional!

MY But the real human beings are different, real human beings  multidimensional, there are so  many things one wants to do , achieve enjoy not just making money. Making money is important part of human life but there are other things you want to help other people, you want to change the environment you live in ,.... those things are not considered within the business framework. I am saying this has a very narrow interpretation of the human being which has distorted the entire economic structure of the whole world

...and that’s why we have created a lot of problems. If we are to include the totality of human being – as real human beings are, I am arguing we need at least 2 types of business;  One business to make money, profit maximisation; another business to do good to people, and to do good to the planet -this can be another type of business because this in your heart the way you think: this will be non-loss, non-dividend company with a social objective. The profit maximising business is all for serving yourself, the person who runs the business- its all aimed at oneself. The other one is aimed at the others, nothing to me but everything to the others- in that way it is completely the opposite system. So we can create non loss non dividend company to address all kind of social issues. Like the poverty – microcredit is a good subject for social business- microcredit is not an area where you want to make money – you dont want to get rich like the moneylender who is maximising his profit instead of letting Sofia Begum make a living. He wanted to maximise his profit so in the process he didn’t let the borrower get any benefit of it. That’s the profit max principle What i am saying microcredit should be a social business: a business to help people get out of poverty not to make money for myself.  It could be a water company , there are many countries where safe drinking water is not available, -polluted waters, in Bangladesh, there’s arsenic contaminated water. So we can create a water company which brings safe drinking water at a very affordable price so every body can drink safely and avoided diseases and health hazards. So this is what I an arguing

RW But this social business is a business?- it’s non loss so lets’s start there : it needs to be self-sustaining, it needs to makes money, and if its a water company it needs to compete against any other water company that may be a profit maximising business – correct , so its a level playing field

MY Its a level playing field- you are giving more options to people, you are bringing more competition in the market – you are fulfilling all the conditions of the free market, and at the same time you are addressing the issues that remain unaddressed by the profit maximiser. There are many things that the profit maximisers will never do.  For example, there are many vaccines available for very important diseases but these are not produced because profit maximisers dont find them attractive enough in terms of making money, so they dont produce that vaccine, and people die. So there is a case where you can create a social business where you produce the vaccine to save the people and you run it a business

RW You produce it profitably, you just dont produce it as profitably as Wall Street might demand – and in terms of no dividend: so all the money you do make instead of being paid out (though if you are an investor, your initial investors get their money back) but once they are even everything goes back into the business. Fascinating. This is like all your things more than theory; you have started a joint venture with Danone- the yogurt company – can you talk about that as an example of a social business at all the levels it works on – from where you have located your factory, to the supply chain and so on

MY When I was arguing about that, people didnt understand- very difficult to touch it what it is that i am talking about. So I was trying to demonstrate cases – one of them was an interesting one that started with a chance meeting with the chairman of Danone in Paris. He invited me to lunch and brought his top officials. He wanted to know about Grameen bank – he was very curious so I answered all the questions. Then I asked him about what does Danone do –so he explained what Danone do . So he explains what Danone does globally. He wanted to know about Grameen , I wanted to know about Danone.

Then I said well why dont we create a company with the name Grameen Danone in Bangladesh. He said to do what? I said you said your yogurt is very delicious everybody loves it – why dont we produce yogurt. The idea is that millions of malnourished children in Bangladesh – we can produce this yogurt and bring all the micrornutrients which are missing in the children –the iodine, vitamins, iron – fortified yogurt and then we sell it to the poor children and make it so cheap that they will find it a very attractive snack. He immediately agreed, let’s do that. I said i am not finished yet. I said it will be a social business. He said what is a social business? So i explained you invest and we invest it will be a joint venture – over time we can take back our investment money but no dividend after that because it will be all for the achievement of the goal that we have set which is to bring nutrition to the children and have healthy children. He immediately said i agree. Then i thought he didnt understand my English! So I sent him an email elaborating everything i said. And he wrote back right away, and said i understood everything,, we agree let’s go and do it.

And we did it. Now that company is operating and that plant has been set up. And we wanted to have a very small plant set up in the village. And the designer of the plant was shocked because he had designed all the big plants in Brazil and Indonesia, mega-plants in China and India – huge pants. So i said make the smallest possible plant because we want to have a tiny coverage area. He couldn’t understand why i am saying that. He was unhappy , spent a few days in Bangladesh, and suddenly he appeared to me – and said Dr Yunus I did it and I am so happy it is acute little le plant _ I have fallen in love with this plant, because i have used all the state of the art technology into this plant that I have not even used it yet in a big plant – so this will work beautifully. And it is working beautifully

RW Why did you want it small?

MY  I wanted it small for several reasons:  so that the area of coverage is small, it will be the local milk going back to the local children, and so that they know the whole process. The economy has become so disconnected, where the milk comes from where the chicken comes from you dont know , you just buy it , you dont know each other and so on. Another thing is the smaller the area of service,  you avoid the cold chain which is a very expensive thing. So you have yogurt you can consume in 48 hours and you dont have to spend a lot of money keeping it cool. And iw as insisting te cups be biodegradable. So they found something from China. I said ca I eat it? They said no you cant eat it. I said no we should have something we can eat – an edible container. I gave the example of ice cream – I said when I buy ice cream I eat the come and I love the cone. Why cant you do that because after all the poor people are paying for it- why should they have to pay for something that they have to throw it away. So you have to look at all possible ways where you cut down the cost- if you are a profit maximiser you are into frills, the more frill you add the more profit come- so you dont bring simple things, you are always adding colour, flavour, container or something big – the real thing is so small but you spend so much on the frills of it so people are paying for that. In case of social business you dont have to because you are doing it to serve the people to address whatever the social goal is.

Qs 56.55

Q My question has to do with the loansharks – I am sure as you developed microcredit opportunities for women, they must have objected –can you tell us more about that

MY Yes they objected , they didnt like it, they spread rumors – but the loan sharks were not the only ones who objected to our work so in the whole crowd they got lost- there were s many who objected to us! Men objected to us - because we lent to women – that was quite aggressive. Then it took a religious shape. Religious people saying that what you are doing is against religion – it must be stopped.  That became stronger than the moneylenders, stronger than anyone else. So we had to go on arguing with the religious people, and we had to draw on the history of Islam and what Islam was all about –how women did everything in ten original period of Islam. And also to remind them that the Prophet Muhammad, he started his career working for a business woman. He worked as an employee of a business woman and later he married her. So I said if you want to be a good Muslim , you look for a business woman. So we had to go through all these kinds of things. Academicians didn’t like it- this isn’t development – giving tiny loans you are fooling everybody, you are destructing things. I said look I am not taking anyone’s money away, this is a business- why are you objecting to it? So the moneylenders were just one of the pieces of the opposition we had to move.

Q Is charging interest a problem in an Islamic country? Has the bank expanded outside Bangladesh? What do you mean when you say the owners of the bank are the borrowers?

MY Yes the bank charges interest and there was opposition because of the conflict with religion. But that didnt last very long since all banks in Bangladesh charge interest so we were not the new ones in charging interest. But since we do it in the villages – banks dont work in the villages – we can close to the people who were very sensitive to the religious issues. Then we had help from many Islamic scholars they said dont worry about this accusation because what you are doing is perfectly all right with Islam. So I said can you explain how we defined ourselves. They said very simple because Islam is opposed to interest as an instrument of exploitation. But what you are doing is not an  instrument of exploration because this bank is owned by the borrowers. The owners cannot exploit themselves. So no matter what its called in the eyes of Islam yours is not the interest that the religion bans. So you are completely safe, the interest is entirely inside. It is not somebody exploiting from the outside. Many people who are a great fan of Grameen bank they will still whisper can you change the name: interest – call it something else, because they feel very sensitive to their religion. On ownership: Yes the borrowers buy the shares. Within Grameen bank  not only we lend money, we collect savings. Even a tiny penny whatever it is. Every week as you pay your installment put a little penny or whatever you can into your saving account. And that grows al lot. When you have more than a dollar fifty cents – as that’s our share price – whenever you have a dollar fifty cents in your saving account you may authorise us to buy yourself a share. It is up to you- you are entitled to a share, you may take it or not –its up to you. But it because so popular to buy one share because it gives a lot of prestige, facility and so on.- so everybody buys  a share. So we have 7.5 million shareholders. They elect their board members – that’s one of the occasions they see how important they are because they elect their members out of themselves – and she can become a board member. That’s a very important position – you are running the biggest bank in the country coming from the village, and our board consists of those borrowers who got elected by the borrowers who voted for them . There is a big contest every 3 years to elect the board. So that’s how they become owners of the bank.

Yes the Grameen Bank idea has spread all over the world. There are many cases where people wanted our help to do it. We have a program called : Build Operate transfer. You give us a contract: we go to the country where you want to set up the Grameen program. We send our staff from Bangladesh to set it up as if we are opening another branch in Bangladesh, we do it, set it up, let it run and bring to a profitable level, and then you tell us who do we hand it over. Or you can let us continue with it.  Run in 7 different countries the build-to-operate. And now many other countries are approaching us to set it up. China has become the most important and very eager country to have build to operate. Each province in China is allowed to negotiate with us. So the idea has spread, and is spreading more and more

Q I want to know where you get the idea – is it spiritual one – because you talk about giving tge person the tools where she can feed herself for life but social business sound like a terrible thing in the United stares so i want to knw if you see it as working in the states where socialism and other isms dont work

MY This one will work! This is just the beginning. We are talking about it and I am sure some =one will start a social business here. There is so much scope here.  Like in my book I mentioned warren Buffett who donated some 36 billion dollars to the Bill Gates Foundation. I was saying before he decided to give this money to the Gates Foundation, I wish I had a chance to talk to him. I will talk him out of it and say why dont you keep at elast some money a and start a social business. And this social business will be to address al the 47 million Americans who dont have health insurance. Because you are insurance man, you know the ins and outs on insurance. So while you are doing a good job, why dont you design an insurance program with your money, start it, and then be remembered in history that you started something that nobody else could do, not even a government could do – you did it. So this is the kind of opportunity available and this could be a beautiful social business to provide health insurance to 47 million Americans

RW With the creation of social business , there is still a role for philanthropy?

MY I am not taking away anything. Just ading one more piece. If you are interested you can take advantage of it . It come from the business side, business people can create social business . It could come from the philanthropy side, foundations can create social business. I am encouraging foundations to create a social business fund within their foundation so that can support wherever social business comes from .

Q Will you talk about your beggars program?

My This is a program we started about 4 years up because there was  lot on controversy on one issue saying that microcredit is a fine idea but that it only works for the entrepreneurial poor. This is one statement I can never stand. Because to me all human beings are entrepreneurs. So there is no entrepreneurial poor and non-entrepreneurial poor. All human beings, rich, poor, or anybody are entrepreneurs because it is part of human being- you cannot take it out, because that’s how we came to this planet- that’s how we survived on his planet – our entrepreneurial capability, creativity.

So we wanted to demonstrate it. One way we thought we could demonstrate it by lending exclusively to beggars. So we started a separate program to lend to beggars. So we sat down with the beggars, talked them and find out at what point he or she became a beggar. What was the tipping point because after all she was a normal human being living her life, at on point she was pushed and pushed and became a beggar, and stretched her hand for survival and taking care of her kids or whatever. Once we went through this stuff, we made one suggestion: as you go from house to house begging would you care to take some merchandise with you and sell. And it appeals to them because we made it clear we are not asking for anything extra. You do it anyway, you go to houses to beg. All you do carry a little basket, a little bag carry candy, sweets, toys for the kids whatever people will like. And people will have options – they will not just shoo you away- sorry I cant give you something to day; you can say i have got something to sell would you care to have a look at it.  Then give them an option maybe people will lie something. And the beggars started liking this Initially we thought we would have 2000 beggars in the program. And we will see what happens to those beggars: can they really run the business? People say you know you’ll need to train the beggars they dont know want a business is. I  said look I am not a training guy, I am not interested in training – so let’s see what happens. It became very popular not only among the beggars but among our staff. We have 27,000 staff –everyone wanted to serve beggars. So i said no only one beggar per person – because at that time I had no idea how this was going to work out. I didnt want to mess up the whole thing because everybody wanted to go for the beggars. But there is a tremendous pressure coming in: they want to have 10 persons per beggar. I said no ten is too many but I started to yield one , two, three now four – now we have come up to four so we have more than 100,000 beggars in our program. And in the last 34 years, what is amazing more than 10,000 beggars have given up begging completely – they have just become door to door salesman. And some of them became very successful personal shoppers because women in Bangladesh cant go to the market, so they ash their husbands to bring this bring that and husbands are husbands they always forget, they cant remember” oh i see tomorrow I will bring it tomorrow, and tomorrow he forgets again. So now it has become very convenient, you just tell the personal shopper bring me this and you pay her and she brings it. The remaining 90000, I would say they are just about part –time beggars because they are mixing selling and begging at the same time. My colleagues are getting very impatient: why cant they join like the other10000 have done – stop begging and concentrate on the selling. I said look they are trying to close down their begging division, they are in the process of restructuring their business , they need to strengthen their sales division so give them time. Amazing thing the loan they ask for – typical 10 to 15 dollars- with 10 to 15 dollars if you could change the live of a beggar into a dignified a salesman that now you are not afraid because you are selling something – I ask when I meet the beggars how does feel to you – one common answer I get , they get very excited not about the money now when I knock on the door, they immediately open the door and let me in. When I was a beggar nobody would open the door, they will just give whatever they give through the window. Now they give me a stool to sit, that changes completely now I am a respected person, and the kids come around and ask what did you bring today, they want to see what they can buy because it is a person who is coming with things they like. And I am also reminded by this, that if Grameen Bank gave $15 to all these 100,000  beggars as a grant as a charity – we could do this buy what would have changed anything? Nothing. They would probably enjoy some food, and a couple of weeks, hey would come back and ask can we get some more. They will still remain beggars, but we designed it as a loan, we said this is an interest free loan.  You don’t have to worry, This money will never grow the 10$ will always be 10$. And there is no time limit, so you dont have to worry about paying back in a month or a year.  Its up to you, the condition is you pay it back you can take another bigger loan – whatever you want, the door is open. All the money we have lent out in the last 4 years – more than 60% of it has been paid back. So this is really something to see how people can take things seriously and challenge themselves.


.please tell your favourite letters to or articles about Dr Yunus



minute 40.25

 Jane Wales:

Dr Yunus- because you’re the world’s best problem solver I have ever known , I am going to ask you about some of the things that are in the plate of the next president  of the united states. He will come in and he will face  

  • poverty including new poverty at home and abroad 
  • the employment crisis
  • the need to provide quality education for all
  • the need to provide affordable healthcare
  • post-conflict reconstruction and reconciliation 

if were you advising the new president, would you urge him to take an integrated approach or to deal with each independently?


Muhammad Yunus

well I can only tell him of my way at looking at it –first of all  if he wants to be serious about poverty – after all, the president of US is de facto the president of the world, so what he does impacts the whole world. So when he talka about poverty he provides the leadership that others take.

Now we have the millennium goals which are a wonderful set of goals which inspire all the world but were unfortunately derailed by other things that came up so first of all restore total support for the millennium development goals and withdraw from other stuff united states got involved in such as war on terror,

so concentrate on the one of  making sure we achieve the millennium goals, achieve them 100% this will be a tremendous achievement for the whole world that we have done something its not some of UN goal setting and forgetting, this is a real goal and a realty to celebrate having done it


and then for this president the best thing is to show total commitment of ending poverty set a new date when the world can be at zero poverty – we have 2015 at halve poverty so why don't we set the next goal zero poverty so that we know this is the direction we need to take,


when we set the date everything else will fall into place:

how do you measure, how do you do it there are several things that will play an important part


1 microcredit   because it has shown its effectiveness in unleashing the capacity of people


2 technology how to bring technology  to the poorest people so that they can change their whole world


3 healthcare


so its nothing separated, its integrated but you cant have one organisation doing everything, you need several organisations but focused so that everything is achieving the same goal to lift the person


and as the president is declaring the date for zero poverty in the whole world at the same time encourage the united states to set their date when their city be zero poverty when their county gets to zero poverty  - if someone says well we have no poverty how do you know if you have poverty or not –its very simple the first question I ask is do you have a welfare program, a welfare department? As long as you have a welfare department you have poverty, otherwise why do you have it, poverty means that nobody is on welfare tat is  clear sign so you have to close down your welfare department, find something else for those people to do, so all the related things you have to welfare you close down as you have crossed that level and you are never going back- city by city, county by county, state by state, it can be done and it will encourage everyone else –

that state can do it, we can do it

this is the way to go, so poverty will be the challenge –and once you have solved poverty other solutions come right away, environment will come right away- like in the case of bangladesh environment and our survival is an integrated problem, we are the ones on the front line – eliminated by global climate change because of our flat country, so for us its such an important issue


the united states missed the whole leadership on the global warming issue, never got to the Kyoto protocol and as a result the whole world got derailed, now is the chance to go back to preparing for the 2012 UN binding resolution .. that way you n=know where you are


the moment government becomes serious , technology starts going in, its not a question of it cant be done , simply we have to make a serious commitment that we will do it-the moment we make the serious commitment, technologies will come , how do we replace the things that are causing the problem, replacing them with new technology without harming anyone in any way


the present way of living life in a way which might enjoy life today but may be harming someone else’s life somewhere  on the planet, its not a good feeling: I am doing something that puts someone else life at stake because of the way I do things – so the basic principle we should all adopt, every child should be taught, every family be taught my way of living should not harm anyone else  , and that’s how I would like to live


its possible once you make that commitment all the environmental problems will be solved

===clue to  yes we can & 5 million green===


What is missing from my booklet of Bangladeshi's collaboration methods involves the meta-systemic miracle of microcredit :look round where microcredit has been sustained exponentially over a decade to survey a checklist of all the different causes and solutions to why a place or culture has stopped investing in the productive potential of youth and/or women.

So it is possible for microcredit authorities to offer action checklists both at the system level of communicated beliefs of leaders or government, and at specific action-business fields of community and productivity where focal innovation leverages include:

*health (including nutrition, water)


*energy (green)


(and of course banks that invest in productivity/microentrepreneurs at community level)

Understanding knowledge-changing role that surveying exponentially successful microcredits can bring is vital if we are to connect the advice dr yunus suggested for Obama in his november talk in california. As someone who knows a bit about mass branding, I am humbled by Yunus' most wondrous system description of why end poverty's goal is all that obama needs to communicate in every speech -and every reconciliation with congress - but I do feel those uniting the championship of millennium goals need to link round why community microcredit is miraculous as a survey of broken system causes, and case solutions


Miss Xiong Ning, 1978 to Mar 10, 2008, died in a traffic accident on her way to Qinghai to help the poor people there. Below is the translation of a draft letter in Chinese that she wrote to Professor Yunus, which was found among the belongings she left behind.)

Dear Professor Muhammad Yunus,

Hello, how are you? First please forgive me if I take the liberty of writing this letter to you. I am a Chinese girl, named Xiongning, 29 years old this year, and born in an ordinary city intellectual family. Since I was young, I have had an ideal that I will set up the same “social conscience-oriented enterprise” as you advocated in Banker to the Poor.

During the period of my high school and college, I have been continuously attempting at my plan, and striving to put it into practice in order to start my own “social conscience-oriented enterprise” and have more grass-root people able to enjoy equal chances to survive and be free from poverty. For this reason I have ever stopped accepting a higher education; refused the work in the government departments arranged by a friend with authority; also resolutely given up the white-collar position in a foreign-invested enterprise, which everyone envies today in China. Perhaps many people think that I tend to go to extremes, but when I see the poor like me or even more outstanding than me, and the rural people, it is not known how much effort they will make, or even give up their dignity, and then can obtain the same opportunities as the rich and the city people. Since having known about you and Grameen Bank through your book Banker to the Poor, I have been deeply attracted by you and your undertakings. Also I have nothing but praise and admiration for your wisdom and ability from the depth of my soul. In the book I have seen my ideal, my role model and my teacher. Through your Excellency and the success of Grameen Bank, and all you have done for the poor in the continuous thirty years, I have been more determined to improve the living conditions of the poor and strive without cease for their human rights. But so far, I have encountered many obstacles, on one hand, because of my own limited capacity and on the other hand, due to other social causes. Therefore, I would like to seek for your help, and hope you can treat me as your student and give me some recommendations like my father generation. I do not know whether you have a deep understanding of China. China has a population of nearly 1.4 billion (of which 1 billion rural population). Taking my own experience, I have been unceasingly exploring and experimenting “social conscience-oriented enterprise”, but such enterprises have to compete in the market to make money, or at least maintain a balanced budget. Facing the fierce market competition, if I have chosen the “conscience”, it means more efforts needed to grasp the game rules of the market competition. As a Chinese, I love my country very much, and I shall “fight” like a soldier to change the status of China's poor people. Here I am wondering how I can start Chinese Grameen Bank under present national conditions, and how this Chinese Grameen Bank, like your Grameen Bank in Bangladesh, is not just a bank, but it can care about all aspects of the poor people. Let the poor find their dignity in labor; participate in social affairs equally; and create their own destinies through their own efforts. Would you please tell me whether Grameen Bank has ever have in the past or still have some projects now in China? What can I do in the future for Grameen Bank in China? Or can I work with you to start a Grameen Bank in China? I am an ordinary person, but my innate conscience spurs me on to live for my ideal (to help the poor and the suffering people); I have no power and influence, but I have a sense of social responsibility and mission; I am not an economist, but I am always striving to end the poverty and sufferings of the poor people. I sincerely hope to have your guidance and help. I hope that China is also to have Grameen Bank for the poor and of the poor. No matter what kind of countries, races, religions, as long as in this world, they are all eager for equality. But “poverty”, like a tiger (a stumbling block) in the way, is a lasting impediment to its realization. However, you Excellency and your Grameen Bank are coming, which has rekindled the hope of the numerous poor people for a better life; and had many entrepreneurs of a social conscience encouraged and learn the experience. You Excellency and your Grameen Bank are of no national boundaries, but the wealth and hope of the whole world and all human beings. You are also the role model for my life-long learning and efforts! Finally, please forgive me again if I take the liberty to trouble you. Fervently look forward to your reply!
Best wishes of health and happiness to your family!

Your new friend: Xiongning June 26, 2007

Inviting world's richest nations to Yes We Can play 5 Greatest Collaboration Games Invented over a third of a century by Developing Economists in the world's poorest nation

1 What is


The most exciting entrepreneurial game people play ...

2 What is MICROCREDIT? Designing the safest banking system so that the poorest are also included in developing the world


Designing human processes around opportunity to gravitate collaborative networking to the most urgent sustainability goals of our worldwide generation


Designing partnerships to innovate the most vital human services that integration of global and local free markets can sustain

5 What is Trillion Dollar Industry Sector Sustainability?  Joyfully mediating markets to be free: - engage transparency of leadership in severe contests between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress.


article USA Today 21 May 2008

Nobel Prize Winner Yunus has a new idea for attacking poverty through capitalism:

Enlist Companies whose Mission is to Change the World

By Alan M Webber, May 21

Muhammad Yunus has already changed the world once, which is why he was awarded the Nobel peace prize. By creating the Grameen bank and using microfinance to improve the lives of the poorest in Bangladesh, he demonstrated a transformational model for eliminating poverty,

Now he's playing an even bigger game. Yunus wants to transform capitalism. Of course, he will never be so confrontational to come out and say that. A story he told me recently describes not only Yunus' mission but also his method

The way he tells the story, every time a new head of the world bank is named, he calls Yunus. When James Wolfensohn became World Bank president, he welcomed Yunus to lunch and began to quiz him about his recently announced goal for reducing - and ultimately eliminating  -poverty

'I understand you intend to lift 100 million out of poverty" Wolfensohn said.

"That's right" Yunus told him.

"Don’t you think this is a little overly ambitious?" asked Wolfensohn

"No" said Yunus. "We've looked at the numbers and we think we can do it. But  Yunus went on "If you think its too ambitious, what do you think is a better number?"

When Wolfensohn didn’t answer, Yunus offered a number

"10 million"?

Wolfensohn shook his head . Too low.

"20 million" Yunus offered.

From Wolfensohn's reaction it was clear that number was still too low.

"How about 50 million ?" Yunus asked

Wolfensohn seemed pleased by that number.

"That sounds right" he said.

"OK" Yunus told him: you do 50 million, and I'll do 100 million".

And that's how you win the Nobel Peace Prize: by making peace with the powers that be, the keepers of the status, quo, rather than declaring war on them.

Yunus is using the same mild-mannered approach in his campaign to transform capitalism. On the one hand, as an economist and now a banker, Yunus embraces the discipline of the market. On the other hand, he believes that profit-maximizing companies turn complex human beings into one-dimensional creatures, devoted only to mailing as much money as possible. Pure-profit maximization is bad for people, for the environment, and ultimately , he argues, for capitalism, since it places unsustainable demands on the system.

But if unfettered capitalism has its shortcomings, so does out-and-out charity. Yunus sees charity as a bad bargain for both those who give it and those who get it. rather than providing a path to self-improvement, charity relieves recipients of the responsibility for their own betterment. And those who give charity find themselves writing a cheque every year for the same problem, without any expectation that it will ever be solved.

Finally, Yunus takes a hard look at Corporate Social Responsibility, and finds little to love there, either. In fact, it is the worst of both worlds. It gives companies permission to operate as pure-profit maximization enterprises, then allow them to feel a little better about themselves by writing cheques for charity.  Nothing fundamental happens to improve the lives of billions of people who are doomed to living in poverty.

Which is not to say there isn't a solution -a brilliant solution as proposed and already tested by Yunus. The answer to the profit maximization versus charity dilemma is to create a new social hybrid option: the social business. A social business must operate in the marketplace and earn the support of real customers who pay real money to buy a real product. At the same time, a social business has a social cause, not just a financial goal.

Yunus can identify myriad such causes; they exist wherever there is an unserved population. A social business could provide health care to those currently left out, feed malnourished children, provide clean drinking water to communities, or offer insurance to the uncovered.

Social businesses have investors - but they're neither hoping to maximise their profits nor writing off their investment as a charitable gift. The first profits from a social business go to paying back the investors. Once they've recouped their investment capital, investors forsake additional returns. Instead, profits from the social business go back into the business, to help even more people. Think of it as capitalism with a human face.

Yunus has test-driven the idea of a social business in a partnership he forged with Danone. A joint venture between Grameen bank and Danone has produced a yogurt social business producing a tasty product for children of Bangladesh. Yunus reports that in less than 18 months, two cups of the fortified yogurt per week dramatically improves the health of malnourished children.

 What's particularly exciting about Yunus' campaign for  social businesses is how timely it is. Americans, in particular, are hungry for his kind of hybrid thinking. Foundations are looking for social entrepreneurs to whom they can give grants. But social businesses offer foundations something beyond grants. Social businesses will offer solutions that will work in addressing societal problems, and at the same time, create solutions that are self-sustaining.

Statistics show that in the USA, 115 non-profits are formed every day, as young people look for work to go beyond making a living to making a difference. Americans want a new option for making real change , one that runs like a business and delivers real help to needy business.

Muhammad Yunus' social business idea offers a vehicle for doing both. It's the kind of creative economic thinking that could earn Yunus a over second Nobel prize - this time in economics.


p.3 There are many things that free markets do extraordinarily well. When we look at countries with long histories of capitalist systems we see evidence of : great wealth, remarkable technological innovation, scientific discovery, and educational and social progress. The emergence of modern capitalism three hundred years ago made possible material progress of a kind never seen before

page 5 what is wrong?

In a world where the ideology of free enterprise has no real challenger, and some nations march toward ever greater prosperity, why has so much of the world been left behind? The reason is simple. Unfettered markets in their current form are not meant to solve social problems and instead may actually exacerbate poverty, disease, pollution, corruption, crime and inequality..Globalisation, as  a general business principle, can bring more benefits to the poor than any alternative. But without proper oversight and guidelines, globalisation has the potential to be highly destructive. Global trade is like a hundred-lane highway with no stoplights, speed limits, size restrictions or even lane markers. Its surface will be taken over by the giant trucks and superpower. ..The rule of the strongest takes all must be replaced by rules that ensure the poorest have a place on the highway. Otherwise global markets fall under the control of financial imperialism. ..The negative impact of unlimited single-track capitalism is visible every day - in global corporations that locate factories in the world's poorest countries, where cheap labour (including children) can be freely exploited ; in companies that pollute the air, water and soil to save money on equipment and processes that protect the environment; in decpetive marketing and advertising campaigns that promote harmful or unnecessary products.

page 18 The concept of capitalism as currently operating is based on one-dimensional human being - a theory that postulates that you are contributing to the society and the world in the best possible manner if you just concentrate on getting the most for yourself. This theory suffers from a conceptualisation theory : a failure to capture the essence of what it is to be human...Today's world (2007) is so mesmerised by the success of capitalism that it does not dare doubt the system's underlying economic theory. Yet the reality is very different from the theory. People are not one dimensional entities; they are excitngly multi-dimensional. Their emotions, beliefs, priorities and behaviour patterns. The presence of our multi-dimensional personalities means that not every business should measure its success not just by how much money did it extract last quarter. And this is where the model of the social business comes in.

P21 social business -what it is and what its not

To make today’s half-developed structure of capitalism complete we need to introduce another kind of business –one that recognises the multi-dimensional nature of human beings. Entrepreneurs of social businesses design organisational systems not for limited personal gain but to pursue broad social goals How can the products or services sold by a social business provide a social benefit. There are countless ways. For a few examples, imagine:A social business that manufactures and sells high-quality nutritious food products at very low prices to a targeted market of poor and underfed childrenA social business that designs and markets health insurance policies that provide affordable medical care to the poorA social business that develops renewable-energy systems and sells them at reasonable prices to rural communities that otherwise can’t afford access to energyA social business that recycles garbage, sewage, and other waste products that would otherwise generate pollution in poor or politically powerless neighbourhoods In its organisational structure, the social business is basically the same as a for-profit business. But it differs in objectives. Like other businesses it employs workers, creates goods or services, and provides these to customers for a fair price. But its underlying criterion by which it should be evaluated- is to create social benefits for those whose lives it touches. The company itself may earn a profit, but investors who support it do not take any profits out of the company. A social business is a company that is cause-driven rather than profit-driven, with the potential to act as a change agent for the world. A social business is very different from a charity. It is a business in every sense. When you are running a business you think differently and work differently than when you are running a charity. There are many organisations in the world today that concentrate on creating a social benefit. Most do not recover their operating costs. Nonprofit organisations and NGOs rely on charitable donations, foundation grants, or government support. Their leaders are forced to devote a lot of their time and energy to asking for money, a form of fund raising that focuses on institutional survival rather than expanding the benefits they can offer to those in need. A social business is different. Operated in accordance with sound business principles, it aims for full cost recovery or even more as it concentrates on creating products and services that provide a social benefit. It pursues this goal by charging a price or fee for the products or services it creates. A social-objective-driven product that charges a price or fee for its product but cannot cover its costs fully does not qualify as a social business. As long as it has to rely on subsidies and donations to cover its losses, it remains in the category of a charity. But once such a project achieves full cost recovery on a sustainable basis it graduates into another world – the world of business. Only then can it be called a social business. The achievement of full-cost recovery is a moment worth celebrating. A social business differs from a charity in another important way. It has owners. A social business doesn’t pay profits to investors but it does pay back to investors all of the money they invested. How long would that take. That is up to the management and investors. Also once the investors are repaid, they remain part owners of the social business with a say in its future. Businesspeople find this an exciting opportunity not only to bring money to a social business but to leverage their own business skill and creativity to solve social problems. That’s a very exciting prospect. 

(p218) Philanthropists of the future will be strongly drawn to social business. Major donors who come from the business world will immediately understand that the social business dollar is much more powerful than the charity dollar. Whereas the charity dollar can be used only once, the social business dollar recycles itself again and again to deliver benefits to more and more people.  If I had been an adviser to Warren Buffett,  I might have suggested he use part of his money to create a social business whose mission would be to provide affordable high quality health insurance to the 47 million Americans without it. If Buffett – a business genius with decades of experience in the insurance industry – were involved in designing this social business, it is hard to imagine how the new company could fail


Adam Smith Lecture at Glasgow University

delivered on December 1, 2008

Distinguished Principal, distinguished members of the faculty of Glasgow University, students, distinguished ladies and gentlemen :

I am very honored to be invited to deliver the Adam Smith lecture here at  Glasgow University.  It is an honor and a privilege for me to be here as part of the celebrations to mark the 250th Anniversary of Adam Smith’s The Theory of Moral Sentiments. Thank you for inviting me here.

Adam Smith provided the conceptual framework of capitalism.  It has been improved and elaborated throughout  its long history.  In the meantime the world has changed enormously.  The need for reviewing the basic structure of capitalism has been felt on many occasions.  But it has never been felt as strongly as it is being felt today.  Capitalism is in serious crisis.  Even so, no-one is calling for it to be abandoned in favor of  some other system, such as socialism, because everybody is convinced that, with all its faults, capitalism is still the best economic  system known to humanity.

Still, in light of the current crisis, there is strong support for  a major overhaul of the system.  I'll try to explain in my lecture today why I think one major change in the theoretical framework of capitalism is necessary.  It’s a change that will allow individuals to express themselves in multi-dimensional ways and address the problems left unsolved or even exacerbated  by the existing conceptual framework.   And although my proposal may be viewed as a significant change in the structure of capitalism, it is actually very consistent with what Adam Smith elaborated so brilliantly 250 years ago  in his Theory of Moral Sentiments.

Rude Awakening

We are living in a time of unparalleled prosperity, fuelled in part by revolutions in knowledge, science, and technology, particularly information technology.  This prosperity has changed the lives of many,  yet billions of people still suffer from poverty, hunger, and disease.   And now, several major crises have combined forces to bring even greater misery and frustration to the world’s  bottom 3 billion people.

Few people foresaw these crises.  The twenty-first century began with high hopes and idealistic dreams,  encapsulated in the UN initiative known as the Millennium Development Goals.  Many of us were convinced that the coming decades would bring unprecedented wealth and prosperity, not just for a few but for all people on this planet.

 Sadly, however, 2008 will go down in history as the year of a rude awakening about the gross weaknesses in our capitalist  system.  It has been the year of the food price crisis,  the oil price crisis,  the financial crisis, and the ever-worsening environmental crisis.  In combination, these crises are causing a profound loss of faith among  people who thought they had full understanding of and control over the global system.

The Food Crisis

Early in 2008, the United Nations World Food Programme (WFP) reported dreadful news — more than 73 million people in 78 countries were facing the reality of reduced food rations.  We saw headlines reporting news of a sort many people assumed we would never experience again: skyrocketing prices for staple foodstuffs like grains and vegetables (wheat alone having risen in price by 200 percent since the year 2000); food shortages in many countries; rising rates of death from malnutrition; even food riots threatening the stability of countries around the globe.

Since the latest peak in global food prices (which occurred in June, 2008), prices have gone down, bringing a bit of short-term relief to millions.  But continuing high food prices have created tremendous pressure in the lives of poor people, for whom basic food can consume as much as two-thirds of their income.

And while short-term relief efforts are essential to stave off the immediate effects of food shortages and prevent widespread famine, it’s also important to step back and take a look at the broader causes of the crisis.  We need to consider how the evolution of the world economy and, in particular, of the system whereby food is produced and distributed has led us to today’s dilemma.  Perhaps surprisingly, the economic, political, and business practices of the developed world have a profound impact on the availability of food in the poor nations of the world.  Thus, solving the global food problem will require a redesign of international framework, not merely a series of local or even regional reforms.

The Green Revolution of the 1950s and 1960s increased crop yields in Asia and Latin America and made many countries that had been reliant on food imports self-sufficient.  Rates of hunger and malnutrition dropped significantly.  The high-yield grain production made possible by the Green Revolution has been credited with saving the lives of up to a billion people.

Now, however, a series of interrelated trends has partially reversed the gains that the Green Revolution produced.

Part of the problem has been the way in which globalization of food markets has been managed over the past three decades.  I am a strong proponent of free trade; I believe that encouraging people and nations to exchange goods and services with one another will, in the long run, lead to greater prosperity for all.  But like all markets, global markets need reasonable rules that will allow all participants an opportunity to benefit.

Today’s global markets, unfortunately, are only partly free, and some of the restrictions and distortions that have been left in place have had devastating consequences for poor nations.

The imbalances caused by this semi-free trade are distorting markets, raising prices, and even destroying agriculture in poor countries that once boasted enormous food surpluses.

Fuel or Food ?

Subsidies for ethanol in countries like the U.S. are one example of this problem.  Intended to encourage the growth of corn and soy to partially replace fossil fuels in gasoline, these subsidies may have made sense when oil cost $20 a barrel.  They were designed to make it economically viable to use biofuels as a partial substitute for relatively cheap and abundant oil — and they worked as intended, as shown by the fact that, in 2007, fully one quarter of the maize (corn) crop in the U.S. was used to manufacture ethanol.  But these same subsidies cannot be justified when oil is at over $50 a barrel — nor can the continuing subsidies for oil production enjoyed by large, highly profitable firms like ExxonMobil.  Both sets of subsidies distort markets, lead to unintended ecological, social, and economic consequences, and should be phased out as quickly as possible.  Otherwise, they will continue to drive up the price of basic foodstuffs both directly and indirectly, including by diverting farmland and other agricultural resources to the production of fuel rather than food.

Food Versus Feed

Increased demand for meat has also distorted food price structures and contributed to worldwide food shortages.  Growing prosperity in some of the world’s poorest nations is, of course, a wonderful thing.  Over the past three decades, millions of people have been able to lift themselves out of poverty.  The credit goes to increased access to free markets, technological developments, and programs such as microcredit that make capital for investments available to those who were once shut out of the capitalist system.

But prosperity is bringing its own challenges.  The amount of meat eaten by the typical Chinese citizen has increased from 20 kilograms per year in 1958 to over 50 kilograms today.  Similar increases have been seen in other large countries such as India, Indonesia, and Bangladesh, which together with China make up nearly half the world's population.  Not only can more and more people in these countries now afford meat, but they are shifting to meat (and away from more traditional, low-meat diets) as part of their adoption of a “modern, prosperous” lifestyle.

Unfortunately, meat-eating is a relatively inefficient use of natural resources.  The number of nutritious calories delivered by meat is far lower than the calories humans can enjoy through direct intake of grains.  Yet today, more and more grain and other foodstuffs are being used to feed cattle rather than human beings.  By some measures, up to a third of the world’s grain production, as well as third of the global fish catch, is being used to feed livestock.  And more and more of the planet’s farmlands are being diverted from the production of food for human consumption and toward the growing of grains for cattle feed.  These changes add several costly steps to the process by which human life will ultimately be sustained.

As a result of dysfunctional agricultural choices such as the decision to shift land use toward ethanol and meat production, even basic foods are becoming more expensive.

There are still other factors worsening the current food crisis for the developing nations.  One of these is the growing difficulty for farmers in poor nations to compete in the increasingly global food markets.

In effect, small farmers in the developing nations are suffering from the necessity to compete against large-scale producers in the developed nations.  It’s a one-sided battle that, so far, has led to devastating results for the poor farmers of the world.

Increasing corporate control of agricultural resources is also harming farmers in the developing world.  As large agribusinesses take near-monopoly control over seed stocks as well as control over supplies of costly synthetic fertilizers and pesticides, more and more small farms are driven out of business, unable to afford the supplies they need to compete in the new global food market.  The rising cost of oil is a significant factor here, too.  For example, many fertilizers are petroleum-based, which means that every increase in the cost of a barrel of oil drives up the cost of fertilizer.  The World Bank reports that, over the past five years, fertilizer prices have risen by 150 percent.  Of course, high oil prices also drive up the cost of irrigation, running farm equipment, delivering goods to market, and shipping foods to and from processing plants.

All of these economic and social problems are growing worse just as global environmental trends are threatening the future of agriculture around the world.  Climate change, drought, and deforestation are turning vast areas that were once fertile farmlands into deserts.  The UN reports that, every year, an area equivalent to the entire country of Ukraine is lost to farming because of climate change.  What’s more, if current global warming trends continue, over the next century, rising sea levels can be expected to flood almost one third of the world’s farmland.  It is easy to imagine what is happening to Bangladesh, the world's most densely populated country, which is a flat country with 20% of its land less than  one-meter above sea level.  As the sea-level keeps rising, flooding grows steadily worse and more destructive.  It is an emerging case of environmental disaster leading  immediately to human disaster.

Financial Crisis

On top of  the food crisis, the oil price crisis, and the environmental crisis,  came the biggest crisis of all — the crushing collapse of the US financial system.  Giant financial institutions along with major manufacturing firms like the auto-makers are going bankrupt  or being kept alive with unprecedented  government bailout packages.  Many reasons have been suggested for  this historic economic collapse: excessive greed in the market place, the transformation of investment  markets into gambling casinos,  the failure of regulatory institutions, and so on.  But one thing is clear: the financial system has broken down because of a fundamental distortion of its basic purpose.


Credit markets were originally created to serve human needs—to provide business people with capital to start or expand companies.  In return for these services, bankers and other lenders earned a reasonable profit.  Everyone benefited.  In recent years, however, the credit markets have been distorted by a relative handful of individuals and companies with a different goal in mind — to earn unrealistically high rates of return through clever feats of financial engineering. They repackaged mortgages and other loans into sophisticated instruments whose risk level and other characteristics were hidden or disguised.  Then they sold and resold these instruments, earning a slice of profit on every transaction.  All the while, investors eagerly bid up the prices, scrambling for unsustainable growth and gambling that the underlying weakness of the system would never come to light.

 In time, the inevitable happened.  The house of cards came tumbling down.  And because of globalisation, this financial tsunami is spreading all over the world.  Stock-markets all over the world are reporting daily about losses in the  trillions of dollars.  But the rich  will not be the worst sufferers  from this financial crisis, rather it will be the bottom 3 billion people on this planet, despite the fact that they  are not responsible in any way for  creating this crisis.  While the rich will continue to enjoy a privileged life style, the bottom 3 billion people will face job and income losses that, for many, will make the difference between life and death.

  We have only seen the beginning of these crises in 2008; it is going to be a long and painful period ahead.   The combined effects of the financial crisis, the food crisis, the energy crisis, and the environmental crisis will continue to unfold in the coming months and years, affecting the bottom 3 billion with special force.

 Over the past three months, world leaders have been particularly focused on the emergency situation on the financial front.  This is quite understable.   But it should not be seen as a problem of high finance only.  This narrow view of the financial crisis is likely to create global social and political problems.   The human aspect of the financial crisis must be integrated into all policy proposals.   The appropriate thing would be to treat all four crises as one crisis, since all are linked together.  So far, governments have kept themselves busy  coming up with super-size bail-out packages for the financial institutions which were responsible for creating the financial crisis, yet no bail-out package of any size  has even been discussed for the victims of the crisis — the 3 billion bottom people and the planet that sustains us all.

For this reason, I have been repeatedly urging  that this mega-crisis be taken as a mega-opportunity to redesign the existing economic and financial systems.

Capitalism is a Half-Built  Structure

Even if we can overcome the immediate crises we face, we will still be left with fundamental questions about the effectiveness of capitalism in tackling such  unresolved problems as persistent poverty, lack of access to health care and education, and epidemic diseases. In my view, the theoretical framework of capitalism that is widely accepted  today is a half-built  structure—one that preventsAdam Smith's "invisible hand" from operating as he believed it should. 


In a sense, we have chosen to disregard half of Smith’s message.  His Wealth of Nations  has drawn all the attention while The Theory of Moral Sentiments has been largely  ignored.  This book could have provided  the foundation for  the other, missing half of the market — the half of the market that  caters to the social consciousness of the people.

 The present theory of capitalism holds that the marketplace is only for those who are interested in profit only. This interpretation treats people as one-dimensional beings. But people are multi dimensional, as Adam Smith saw two and a half centuries back. While they have their selfish dimension, at the same time, they also have their selfless dimension.  The theory of capitalism, and the marketplace that has grown up around the theory, makes no room for the selfless dimension of the people. If the altruistic motivation that exists in people could be brought into the business world, there would be very few problems that we could not solve.

Adam Smith’s  Theory of Moral Sentiments begins with the  assertion that “How selfish so ever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it. Of this kind is pity or compassion, the emotion we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrows of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous or the humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.”

 Smith then asks that most fundamental question: Why do we regard certain actions or intentions with approval and condemn others? At the time, opinion was divided: some held that the only standard of right and wrong was the law and the sovereign who made it; others, that moral principles could be worked out rationally, like the theorems of mathematics.

Smith took the view that people are born with a moral sense, just as they have inborn ideas of beauty or harmony. Our conscience tells us what is right and wrong: and that conscience is something innate, not something given us by lawmakers or by rational analysis. And to bolster it we also have a natural fellow-feeling, which Smith calls "sympathy". Between them, these natural senses of conscience and sympathy ensure that human beings can and do live together in orderly and beneficial social organizations.

With these ideas in mind, we can see that Smith’s other great book, The Wealth of Nations,  has probably been misinterpreted.  Smith’s thesis  in that book is generally summarized as an argument that all will be well if people are allowed to follow "self-interest".  The world has interpreted "self-interest" as equal to profit maximization.   But with human beings as they are, driven by conscience and sympathy as well as the desire for profit,  we see that "self-interest" includes both profit maximization and social contribution.  That's what Adam Smith elaborated in The Theory of Moral Sentiments, which attached great importance to justice and other moral virtues, perhaps to clarify the boundaries of "self-interest".

The present structure of economic theory does not allow these other dimensions of people to play out in the market place.  I argue that, given the opportunity, people will come into the market place to express their selfless urges by running special types of businesses specifically designed to improve the lot of humanity in general.  In the absence of such an opportunity in the market place,  people will express their selflessness through charities. Charitable efforts have always been with us, and they are noble, and they are needed. But we have seen that business has a greater ability than charity  to innovate, to expand, and to reach more and more people through the power of the free market. Imagine what we could achieve if talented entrepreneurs and business executives around the world devoted themselves to goals such as ending malnutrition, providing shelter for the homeless, and eradicating disease.

Social Business

With this in mind, I am proposing a second type of business to operate in the same market along with the existing  profit maximizing businesses.   I call this new type of business “social business,” because it  exists for the collective benefit of others.

 A social business is a business whose purpose is to address and solve social problems, not to make money for its investors. It is a non-loss non-dividend company.  The investor can recoup his investment capital, but  beyond that no profit is to be taken out as dividends by the investors. These profits remain with the company and are used to expand its out reach, to improve the quality of the product or service it provides, and to design methods to bring down the cost of the product or service. If the efficiency, the competitiveness, and the dynamism of the business world can  be harnessed to deal with specific social problems, the world will  be a much better place.

The concept of social business crystallized in my mind through my experience with the Grameen companies. Over the years, Grameen has created a series of companies to address different problems faced by the poor in Bangladesh. Whether it is a company to provide renewable energy,  a company to provide healthcare, or yet another company to provide information technology to the poor, we were always motivated by the need to address the social need. We designed these businesses  as profitable companies, but only to ensure their  sustainability so that the products or services they provided could reach more and more of the poor - and on an ongoing basis. In all these cases, the social need was the only consideration; earning a profit  was no consideration at all. That is how I realized that businesses could be built that way, from the ground up, around specific social needs, without relying on the motive of  personal gain.

The concept of social business got international attention when Grameen Bank  launched a joint venture with Danone, a multinational company from France.  Grameen teamed up with Danone to bring nutritious fortified yogurt to the undernourished children of rural Bangladesh. The aim of this social business is to fill the nutritional gap in the diet of these children. We sell the yogurt to the poor children at an affordable price, charging just enough to make the company self sustaining. Beyond the return of the original investment capital, neither Grameen nor Danone will make any money from this venture, by agreement. We have one yogurt plant already operating in Bangladesh, and in time we hope to have 50 such plants throughout the country.

Grameen Danone is just the first social business we have launched.  We also have built an eye care hospital on social business principles.  And we have created a joint-venture with Veolia of France to deliver safe drinking water in the villages of Bangladesh.   This joing venture is  building a small water treatment plant to bring clean water to 50,000 villagers, in an area of Bangladesh where the existing water supply is highly arsenic contaminated.  We will sell the water at a very affordable price to the villagers to make the company sustainable, but no financial gain will come to Grameen or Veolia.  Now more and more companies are coming forward to partner with us to set up new social businesses. We feel excited about  creating a series of examples of social businesses, which, hopefully, will encourage others to join in.

Some people are skeptical when I describe the concept of social business. Who will create these businesses? Who will run these businesses? Why would anyone devote time, energy, and money to projects with no hope of personal gain?  I always say that, to begin with, there is no dearth of philanthropists in the world, no dearth of donor countries giving grants. People give away billions of dollars every year.   So do donor countries.  Imagine if those billions could be used by  social businesses  to help people. These billions would  be recycled again and again, and the social impact could be all that much more powerful.  In the same way, money allocated by  companies to corporate social responsibility projects could easily go into social businesses. Each company would  create its own range of social businesses.   We can also create Social Business Funds to pool funds from many sources and invest them in social businesses.  The opportunities for launching social businesses are really limitless.

Business Owned By the Poor

Even profit maximizing companies can be social businesses if they are owned by the poor. This constitutes a second type of social business. Grameen Bank falls under this category of social business. It is owned by its poor borrowers.

The borrowers buy Grameen Bank shares with their own money, and these shares cannot be transferred to non-borrowers. A committed professional team does the day-to-day running of the bank. Every year, dividend checks are sent to the borrowers, representing their share of the bank’s profits.

Bilateral and multi-lateral donors interested in supporting economic development could easily create social businesses of this type. When a donor wants to gives a loan or a grant to build a bridge in the recipient country, it could create instead a "bridge company" owned by the local poor. A committed management company could be given the responsibility of running the company.  Part of the profits earned by the company would  go to the local poor as dividends,  while part would go towards building more bridges. Many infrastructure projects, like roads, highways, airports, seaports, and utility companies could be built in this manner.

Once the concept of social business is included in economic theory, thousands of people will come forward to invest in social businesses because of the  social dreams they have in their hearts.

Social Stock Market

To connect investors with social businesses, we will need to create a social stock market where only the shares of social businesses will be traded. An investor will come to this stock-exchange in ordee to  find a social business, which has a mission to  his or her liking, just as someone  who wants to make money goes to the existing stock-market.

To enable a social stock-exchange to perform properly, we will need to create rating agencies, standardization of terminology, definitions, impact measurement tools, reporting formats, and new financial publications, such as, The Social Wall Street Journal, and new electronic media, such as, Social Bloomberg. Business schools will offer courses and business management degrees to train young managers how to manage social businesses in the most efficient manner, and, most of all, to inspire them to become social business entrepreneurs themselves.


We live in a globalized world, for better or for worse. What we do in one part of the world  has a direct impact on another. We are now connected and inter dependent in an unprecedented way. This can be a good thing, this can be a bad thing. Good waves spread quickly. So do bad waves.  The shock-waves from the collapse of the financial system in the USA  are being transmitted globally.  The whole world now suffers for something which happened in the USA.

 The wrong doings of the rich world impact heavily on the lives of the poor. The life-style of the North can make lives in the South unsustainable.

The issue of climate change is a very good example of this.

The world has many resources but many of the most important resources are  non renewable. We have to understand that the patterns of our consumption, and the path to development that the world is taking could seriously endanger our future on this planet. The food crisis is in part caused by changes in climate patterns produced, scientists believe,  by human activity.

My country, Bangladesh is one of the  countries that will be most affected, and most quickly, by the effects of climate change. But in the long run, every country will suffer the consequences of global warming.    We have to understand that we all have to share this world with everyone today, and also with future generations.

We have to design a new global economic architecture to make sure that one person's enjoyment of life does not take away another person’s right to  survival,  and that one generation’s  enjoyment of life does not put another generation in peril.

The Role of Social Business in Globalization

I support globalization and believe it can bring more benefits to the poor than any alternative. But it must be the right kind of globalization. To me, globalization is like a hundred-lane highway criss-crossing the world. If it is a free-for-all highway, its lanes will be taken over by the giant trucks from powerful economies. Bangladeshi rickshaws will be thrown off the highway. In order to have win-win globalization, we must have traffic rules, traffic police, and a traffic authority for this global highway.  The rule of "strongest takes all" must be replaced by rules that ensure that the poorest have a place and a piece of the action, and are not  elbowed out by the strong. Globalization must not become financial imperialism.

Powerful multi-national social businesses can be created to capture a share of the benefits of globalization for poor people and poor countries. Social businesses will either bring ownership to poor people, or keep the profit within poor countries, since taking dividends will not be their objective. Direct foreign investment by foreign social businesses will be exciting news for recipient countries. Building strong economies in poor countries and  protecting them  from plundering companies will be a major area of interest for social businesses.

The Worst Crises Offer  the Best Opportunities

Most important, the current mega-crisis should not distract  donors and world  leaders from the  search for long-term global solutions. Instead they should  see this as a mega opportunity to address  long-term problems in their integrated solution packages.

The current multiple-crises offer us all a valuable lesson in the inter-connectedness of the human family.   The fate of Lehman Brothers and that of poor sisters working in the garment factory in Bangladesh are linked together.  The fate of a rice farmer in Bangladesh, a maize farmer in Mexico, and a maize farmer in Iowa are all intertwined; and while short-term trends may appear to benefit a few of us at the expense of many others, in the long-run, only policies that will allow all the peoples of the world to share their progress are truly sustainable.

In the coming months the multiple-crises will reveal more of their  ramifications in economic and human terms.  This is the time to bring the world together to face this crisis in a well planned and well managed way;  to take this crisis as the best opportunity to design and put in place a new economic and financial architecture so  that this type of crisis will never recur again, long-standing global problems will be addressed decisively, and the incoherence and deficiencies  of the current economic and financial order will finally be removed.

The most important feature of this new global economic architecture will be to bring the half-built  theoretical framework of capitalism to completion by including the second type of business, the social business, in the market place.  Once it is included in the framework, it can play a very important role in solving the financial crisis, the food crisis, the energy crisis, and the environmental crisis. I It will also provide  the most effective institutional mechanism for addressing  the unresolved problems of poverty and ill-health.  Social business can address all the problems which are left behind by the profit-making businesses, at the same time as it tones down the excesses of the profit-making businesses.

We can start introducing social businesses in the bail-out packages for the bottom 3 billion people, by creating a global social business fund to provide loans and equity for :

a)      Expanding microcredit programs

b)      Supporting other poverty reduction programs

c)      Providing technology infrastructure for the poor

d)      Improving agriculture in the developing world (through programs such as  agricultural credit; local, national, and international marketing; storage; introduction of new technology; insurance;price and wage guarantees, and so on)

e)      Providing healthcare and health insurance

f)       Protecting the environment and providing renewable energy

g)      making globalisation work for the poor  

Poverty can be overcome

As we devote ourselves in crafting a new economic and social architecture, what should members of the younger generation, like  you, be getting ready for ?  I see one exciting option for you --- to list all the features of the new world you want to create, and then work for it.  I hope among all the features in your wish-list an important one will be to create a world without poverty.

The thought that always energizes me is that the poverty is not created by poor people.  Poverty is an artificial imposition on the people.  Poor people are endowed with the same unlimited potential for creativity and energy of  any human being in any station of life, any where in the world.  It is a question of removing the barriers faced by poor people to unleash their creativity to solve their problems.  They can change their lives, if we only give them the same opportunities that we have .  Creatively designed social businesses in all sectors can make this  happen in the fastest way.

I always insist that poverty does not belong in civilized society. Poverty belongs only in a museum where our children and grandchildren will  go to see what inhumanity people had to suffer, and where they will ask themselves how their  ancestors allowed such a condition to persist for so long.

You, the next generation, have to make a pledge that it will be your generation that  will  ensure the elimination of poverty from this planet. We overcame slavery. We overcame apartheid. We have done other things that people once thought impossible. We have put human beings  on the moon. We can overcome poverty, if we only decide that poverty  does not belong to the world that you want to create. It is up to your generation to decide that the world you choose to live in will not contain the scourge of poverty.

You Can Make it Happen

We are fortunate enough to have been born in an age of great ideas and great technologies.  A lot will rely on your asking yourself, "What use do I want to make of my creative talent?" Do you want to focus exclusively on making money? If you must, go ahead;  but while  making money through profit maximizing businesses do make sure that your businesses make a positive impact on people’s lives, or  at least, make no   negative impact. Alternatively, you could use  your talent to change the world by harnessing the power of creative social businesses to address human and social needs.

 Of course, you can do both types of businesses. Making money through responsible profit-maximizing businesses could be the means, while using that money for social businesses could be the exciting end.

The solutions to many of our world’s pressing problems could be accelerated through the creation of social businesses.

It is up to you to make it happen.

 If you choose this path, paying attention to your conscience and to human sympathy as well as to the design for wealth, you will be the true economic person Adam Smith had in mind.

Thank you.

LSE Talk


I will not go into the details of Grameen bank. We started back in 1976. The only thing I would like to mention is I was not a banker, no training in banking of any kind, ..I was teaching in Chittagong University, teaching economics, but I was gradually drawn into it –without any kind of background in lending money or banking – that was the circumstances which pushed me into it, I never designed it that way, people think about their future in terms of what they would be – as a child we do that we want to become a pilot or a filmstar or a firefighter but not even as a child  did I think I would be a banker, and of course when I grew up that thought never came into my mind.

But this is what I became, people introduced me a banker, so here I am., But what we did could be done because I knew nothing about banking..if I knew about banking probably I wouldn’t have done that. So this is one consolation for people who don’t know things...there is a great future waiting for you..
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This is an advantage- sometimes a real advantage not knowing – because if you know things you inherit a  mindset. And once you have that mindset you cant breakthrough that mindset. And this is our biggest problem in life : breaking through the mindsets. And institutions of higher learning where all these mindsets are really formulated; and once you go through it, you thought you received knowledge giving you a very clear vision to see the world; in reality it may be the other way, you lose your vision, the freshness of your vision is lost, because we try to imitate, fall in line with the existing thoughts.

This is the most unfortunate part of the educational process - the way I felt all along :in the process of education we become the mini-professor; the professor who taught us and we follow the professor so closely we turn out to be a tiny image of that professor. That’s we have such a school of thought and such a school of thought – how come in that school of though some other school of thought does not penetrate. Because everybody follows that procedure.  I mention this because the greatest battle I have to fight is mindsets. People tend to think the way they are trained to think- they cannot get away from it. So this is a change for academic systems – how to retain freshness of mind whilst bringing knowledge to students.


 If you look at Grameen bank for example – if you raise the question how did you decide on the procedures that you gave created in Grameen bank, how did you design these things, where did it come from whatever you have done- my answer would be a simple one – it is not exactly what it is but it describes what it is-  in a lighter vain I can say whenever we need a little procedure in  a specific case of in doing our work in Grameen bank in the early years we just looked at the conventional banks, what  do they do in such a situation, and once we figured out what they do, we just do the opposite. So if you take piece by piece almost you will see the reflection of it. Everything we do - almost the opposite of what the conventional banks do. So sometimes people think that microcredit means giving tiny loans, which is true but they don’t see how the whole system works – then the real microcredit will come out. The basic principle of banking is : the more you have the more you can get. That’s the basic principle. You have to have a lot to get lot. The corrolary of it:  if you have less, you get nothing

And we reversed that basic principle. Our principle sis: the less you have the higher attention you get from us. If you have absolutely nothing then you get the highest priority. So we started from that basic premise and built the system on that.

Conventional banks look at your position/ your wealth and against that they give you new money to accumulate more. We dismissed that on day one: we said that if you want to do business with the poorest people to ask for any position – and design system on base of that – is useless and ridiculous. So we don’t have any collateral in Grameen bank or microcredit programs – so no collateral , no guarantee, no lawyers, we don’t have any lawyers. And these are the basic features of the conventional bank. You cannot go to a conventional bank and do business with them without lawyers looking over everything you do. So we said it would be useless to have all those things – and we designed something that does not depend on that. So basically it is a trust-based banking, and funnily enough it works. And its particularly amazing at this moment when you see the subprime crisis where you have the collateral, the  lawyers, everything but it didnt work – you are now ready to write off some 400 billion dollars.


And microcredit is going on with us for 31 years, and many more orgs for lesser time, but is a globally operating system. One common thing you hear about MC is a very high repayment rate 98-100% despite the fact that you are doing business with the poorest people. And conventional banks want you to have lots of experience in the business for which you are borrowing money.  You are supposed to be an expert in your business. We go to women to tell her what Grameen bank will do , encourage her to take a loan and get into some income generating activity; and her answer is always please dont give me money I dint know anything; she will repeatedly mention I dont touch money, I never touched money in my life- give it to my husband. But we dont walk away. In the beginning my students, who were working with me were frustrated – why dont you forget about women? – they say they dont know anything , how can you give something to people to do to use money when they say they dont know  anything about what to with the money. So repeatedly i needed to talk to them... that when the women say they no I dont know what to do , dont take it as their answer this is not their voice; this is the voice of the history- the history that generated fear after fear in them and made them believe that they are nobody; they have no capacity to do anything except to take care for the children and the family. So that’s how when you come with the money , they kind of get scared, something terrible will happen to them, so our job is to peel off that fear, layer by layer, so that one day we can build enough courage in them that one or two will say: well let me try. So that’s the day we will be waiting for- so dont give up. We had to work for 6 years to bring the level to 50-50 –because this was our initial decision that half of our borrowers must be women. Because I was complaining against the conventional banks – not only are they wring by rejecting the poor people from their system, they are also wring and unjust to reject women for their system – all kinds of women any levels of income., I pointed out that not even 1% of their borrowers were women. This was mid 1970s when I was complaining. Today in 2008, you can almost repeat same compliant in Bangladesh.

 The situation has not changed. So when I began I wanted to make sure half the borrowers in my system are women.  So that’s why we try to encourage women for 6 years. Once we achieved that we saw that the money that went through to the family by women brought so much more benefits than the money that went to the family through men. So we started asking the question what is so good about 50:50? Why stick to 50:50, why mot open up and concentrate on women if it is so good with them. So we did –and we started focusing women as a result we moved from 50 to 60 to 70 to 90% .

Today we have 7.5 million borrowers in Bangladesh – 97% women. And they own the bank- this bank is owned by the borrowers themselves.

We encourage the children of Grameen families to go to school. So we came up with a system where we finally succeeded in nearly 100% of children being n school. Then we started giving scholarships because some of these children not only went to school but they were at the top of the class- This is a kind of a thrilling experience to see  - not only for first time in the whole history of their family did someone go to school, but he or she is top of the class.  Every year we have a little ceremony in the village honoring the new recipients of scholarships and recognising their parents and invite all the important people of the village so the family and the child feels tall that they have achieved something. Last year we have given 51000 children scholarships for their performances in the schools.

4 FREE MARKETS FREE WOMEN  (or whomever history has discriminated against whereas conditional aid spins white man’s burden)

Then we saw these students gradually moved into higher education -; so we introduced education loans, we have 21000 students on education loans going to medical schools, engineering schools, universities, some of them completed phds some scholarships in international institutions – and now we are offered scholarships from Harvard, York College n NY, MIT is considering offering scholarships to children coming from Grameen families. So this is an amazing kind of thing that you notice. When I go to the villages meeting these women who have been working so hard to make a difference in their life, it is an amazing experience being with them.  And now I see a new phenomenon coming, added to that, when I visiting the daughter from the city comes in having just finished her degree in medicine. She is a doctor practising now- so I see the mother and the daughter standing side by side , one is an illiterate person who joined Grameen bank 15 years ago, took tiny loans started her life, sent her daughter school , now she’s a doctor- so you can not escape the though entering your mind looking at these 2 ladies standing next to each other that her mother could have been a doctor too. But society never gave the chance to her mother – all we have done through Grameen bank allowed her to improve her income and the capacity to send her daughter to school and ... to become a doctor. Our mother must have the same elements in her- there is no reason why she should have less than what her daughter has. ...


The conclusion you come to is that poverty is not in the person, it is created by the system. So if you want to address the issue of poverty, it is not rushing to her but rushing to us – what did we do wrong, where did we go wrong, fix it up – if we can pick up the seeds of poverty that we have put inside all the institutions , policies, concepts we have built, nobody in the world will be a poor person., There is nothing wrong in the human way. We messed it up and them blamed them – ah these are lazy people or whatever!

Sometimes I describe poverty by comparing with the bonsai tree- the little tree that you grow in a flower pot. If you take the best seed of the tallest tree in the forest, and put in a flower pot, it doesnt grow at all , it grows this big. And you wonder what happened to this tree, why doesnt it grow,. There’s nothing wrong with the seed, we picked the best seed. Thing that went wring was the base we allowed that seed: the flower pot; so it couldnt get the nourishment to grow as tall as the tree we saw in the forest.  And I try to explain that the poor people is bonsai people, there is nothing wrong with their seed, only society never allowed them the space to grow. So its not their fault. The fault is not in the seed but the base we provided to the seed. So if we change the base they will be as tall as anyone else. So that’s the challenge : how to change the base so people can grow


In Grameen bank. We encourage the children to go into education, to create a completely new second generation because getting out of poverty is just simply crossing the line. In a country like Bangladesh, crossing the line doesnt ensure you remain out f poverty. Because we are a country with all kinds of disaster happening all the time. Flood is a very common phenomenon – last year we had 2 major floods and then on top of it we had a big cyclone at 250 km per hour speed  ; it blew away peoples possessions, then a tidal surge came and washed away - killed people,  eliminated their livelihoods and so on. So that’s the environment where we live. So we thought if we can concentrate on the second generation - to grow into a different kind of persons - so that they will be far far away from the poverty line, so that even if a disaater comes they will not be pushed back into poverty- so that’s our effort to make sure we can do that


Several features that I will quickly mention illustrated by what we practice at Grameen bank. We have 2500 branches all over the country –each branch is graded by a 5* evaluation system,  like hotels. Our branches are always looking at number of stars shows level of accomplishment they have reached. Green star means 100% repayment record for the whole year. Blue star means they have enough surplus of deposits over loans they give.  Each branch has to find its own money , monyt does not come from anywhere else not from head office, not from neighboring branch. When we open a new branch, literally we literally give an address to the branch manager. Here is the place you are supposed to open a branch, go and open the branch. We dont give you any money. He goes to the address, finds it where its suppose to be, his job and colleague who accompany him to start the branch is to mobilise deposits as a bank. He still doesn’t have an office yet, but he starts mobilising deposits. As he starts mobilising deposits his task is to organise poor women in village so he can start lending them money because hen the income starts coming in. So he must rely 100% on the deposits of his branch to lend out money and then create a cushion, a surplus so thgat in emergency situation still he doesnt have to borrow any money. So if branch gets such a surplus it gets another star.  Our basic principle is when you open a new branch, not only you run branch with money you mobilise in locality  you must get to a break even point within 12 months. And they do that within 12 months they come to a break point – and get another star the brown one. The fourth star comes when all the children of Grameen  borrowers are in school.  Not a single child is missed. Then you get a violet star. On average a branch has 4500 borrowers (with 10000 children) so this is quite a tough task, They work very hard to see why anyone is left out, why someone has dropped out and how to get them back in school, its a continuous cycle but when you have ensured that you get the star.  And when you have all these 4500 families out of poverty, not a single family in poverty, you get another star. S when a branch has 5* this is quite a significance achievement for anybody. I tell my colleagues if I ran the country, I would give 5* a state honor because after all helping people get out of poverty is what the state is trying to do but you have done that with no cost to taxpayers, you have done it on your own, the money came for the locality, donors didnt help you out, its all yours. So having a 5* branch – you have solved the problems that you set for yourself

If you ever visit a Grameen branch, first questions to ask are how many stars have you got and what colors. Then you know what they have done – if they say they have 3 stars then most likely they will say we will get our fourth start by April this year because everyone is planning when their next star is . When I meet 100 village staff, the traditional pattern is the 5 stars sit at the front, 4* in the next row back and so on. And those in the front sit with pride- we dont give any financial benefit to 5*. I have always said that financial benefit will take away their pride –its not something you convert in money, you stand tall you have done the work, this is your pride you have contributed to your society. And when I meet someone with no stars, I always hear somebody saying dont worry the next time you come next I will be at the front. He knows he has to earn a lot of stars, he’s assuring he’s working on it. That kinds of energises the whole system that you are doing something you take pride in – important thing that you do


And in connection with that I will mention something else relating to pride. One of the criticisms often made of microcredit is : one has to be really entrepreneurial person to benefit from microcredit- so only the entrepreneurial poor benefit form microcredit. Whenever I hear that it really burns me up, because I firmly believe all human beings are entrepreneurs. No exception This is a package in which all human beings were born. It is not something that can be taken away still you call a human being. That’s how we came to this planet, survived on this planet, and that’s what we are. Some may have discovered it, others may not have discovered  it - the talent inside them – because society never allowed them to discover it – so the wonderful gift of creativity , entrepreneurship and energy and innovativeness that each human being is born with – not every person is lucky enough to unwrap that gift – you got the gift, but nobody introduced you to that gift and ever allowed you to unwrap and have a peep at what you have got, you dont even know you die without ever knowing what you could have been, That is not her fault, not his fault, its the fault of the society that never allowed that opportunity.


 So after repeatedly debating this, about 4 years ago we said let’s demonstrate this. Let’s create a separate program where we exclusively lend money to beggars. My argument is you cannot be poorer than beggars and if they can show entrepreneurship, then you have made a point.  So we started doing that – go to the beggars sit down with them spend hours talking – our first question: at what point in life did she become a beggar.? Its an important point : society has pushed and pushed and finally brought her to the tipping point –and she couldn’t take it any more and stretched out her hand:  please help me I cannot survive anymore, help me to survive and feed my children. By understanding this process you understand the whole society, how ruthless it is to push a person to that level. After we go through this process, we said well : we can do something if you want to. As you go from house to house begging, would you like to carry some merchandise with you – some candy, some cookies, toys for the kids whatever people would like –if you’d like to do that we will be your financing.  That will be your business and we will be your financier. And people started liking it, why not?  And we encouraged thee and said after all you are going there anyway. This is no extra work for you. So give people option- and they may like to buy something from you or they might t lie to give you charity – and they have 2 options. It became popular with the beggars, but what is amazing it became extremely popular with our staff. I didnt expect that . I thought they would be grumbling we already have enough work. Instead they kept pressuring that they wanted to make more beggars into the program because I had made the rule that nobody can take more than 1 beggar to serve. They became so involved in it that they wanted to take more beggars. I said no just one beggar. My idea was if you have too many beggars with you will probably not pay attention to them ; so if there’s one you will pay attention. This is addition to their regular work – so they will be doing everything, this is additional responsibility, optional responsibility, nobody required to do it. We  have 27000 staff and very quickly 27000 beggars were in our program!. And the staff were saying give us 10 beggars, we can handle 10, and I said no way.. The pressure became so unbearable so I finally allowed 2,3 4, step by step. Now we are at the 4 level so we have more than 100000 beggars in program. In the 4 years, amazing thing is that more than 10000 beggars have quitted begging completely – they are door to door salespeople – some are successful personal shoppers- because in Bangladesh like many other countries women cannot go to the market to buy simple things so she has to tell the husband please bring me matches, bring me this and when husband comes home at night ask did you bring it – oh I forgot – so now she has found a way – this person is becoming a go-between the market and the woman. And the remaining 90000 beggars I would say they are part-time beggars; they are mixing begging an selling at the same time but they are still in the process. My impatient colleagues – some of them why cant they get out of begging like the others:  I said dont push them , that’s not what the whole idea is- they are in the process of closing down their begging division; and this is their core business-to close down the core business takes a lot of time, and in the mean time they have to build up their sales division so its a restructuring of their business. And when you talk to beggars, these are smart people. They tell which house is good for begging, which is good for selling – I say to myself this is good, they know the market segmentation! Its amazing. We never trained them – all we did was just a loan for things they would like to carry round. They figure out which is a best-seller, shifting into those items. And the loan: that we give- typical loan is 15 dollars. With a 15 dollar loan, if you can help a beggar to change his whole life – why can’t we do more of it? Society is so blind that wouldnt even allow this 15 dollar loan to a beggar who would like change his or her life. Our idea is very simple: this is a loan you have to pay it back whenever you can. But there is no interest on this loam; so it will never grow- so dont worry about it getting big. And there is no time limit, so you’ll never become a defaulter. So you are immune from all those worries.

So again coming back, if a beggar can figure out how to run business and change his or her life, how can we say that they are to blamed for their poverty? If the system is at fault, who dont you fix the system. If institutions are at fault, why dont you fix the institution like banking for example which never gave any loan to poor people. Two third of the world population dont have the eligibility criteria to satisfy the conventional banks. So they are not creditworthy in their eyes – so why dont you fix those institutions. 31 years ago they could say they are not creditworthy. Today they cannot say that. The recent subprime crisis proved it again.: the poor are more creditworthy than the borrowers if the conventional banks. So this is the question, and I am raising the question again about institutions, the concept –and one concept I focus on is the concept of business. The concept of business : to maximise profits.. And I look at it: the economist, the theoreticians  who built this theory – they assume that human beings are like money making machines, they look like robots, they just maximiae profits. But the real human beings are not robots, are not single dimensional human being of economic theory, real human beings are multidimensional human , that’s what the beauty of the human being, why cant we bring the whole human being into economics. Rather than cut off the real interesting part of human being and leave only the money part of human being. That’s not a fair interpretation of human being. So I am arguing that if you want to justify the totality of human being, you need at least 2 kinds of business: one that we already have making money, the other business is to do good to people , do good to the planet.


 I am calling it Social Business. It is a non loss non dividend company with  a social objective. So if the traditional business, the one recognised in economics, is all about me -I want to benefit everything that’s why I run business it also has to come to me I am the owner; the other business is all about others nothing about me, just the reversal. Then we can put the two together, that what the human being is ;-the human being wants to make money and be helpful to others. That’s part of human being – you cant deny this. But today you can’t exercise that, if you want to exercise it you have to step outside economics and become a philanthropist involved with charities. Why cant we within the economic world be a fill human being. So that’s the idea of social business. And if we can create a Social Business this can be much more powerful than philanthropy or charity. Because in charity , charity dollar has only one life , you can use it only once. If you want to do it again ,you have to find another dollar to do it. So you are dependent on someone to repeat it because it doesnt go beyond one life. But if we can transform their whole thing into a social business, social business dollar has endless life, it recyles , and it is sustainable , it creates an institution.

 Charity does not create a permanent institution,. Its a program, you do it, achieve it, that’s the end of it . If you want to repeat it you have to have fresh money to do it again. But not in business, in business it just circulates. One of the examples I give in my book is the Grameen-Danone collaboration in a social business. We created this yogurt company as a social business, both sides agree for a social purpose there are millions of malnourished children in Bangaldesh—and other countries but we have our share – because their diet is so poor , so what we have decided is that we will take all the micronutrients that is missing in children and put these into the yogurt, all the vitamins iron zinc etc, and then sell this yogurt at a very cheap price to the children of poor families, and they will enjoy it because it is a delicious yogurt and they love it. And the company recovers its cost. Its not based on charity or subsidies. But both partners agree that they will never take any dividend out of it, because its a social business.

In Social Business you dont take any dividend out , you can take back your investment money, exactly what you invested, but it stops there. Because all the profit made by the company is stays with the company to achieve the goal you have set for it. So here the bottom line is how much impact have you made in the life of people, that’s the bottom line. Unlike the bottom line how much money have you made in your business.

By accepting the social business model  we have a complete  structure  so that we can transform all the issues of poverty, healthcare, nutrition, safe drinking water, sanitation by social business models. And make a difference on all the problems we see surrounding ourselves, So then in the business schools that give you MBAs young people to be trained to joined the maximising company, we need another department at school that will be creating social MBAs trained to design social business  how to measure impact, how to reduce the cost so you can go to the poorest people and improve the health, improve the social conditions of whatever social goal you have defined because the whole thing will be calculated completely differently. So one of the issues that I raised with Grameen Danone, when I was asking what kind of cup do you use in selling yogurt because they sell yogurt all over the world. They showed me the cup I asked is it biodegradable, they said no its not. So I said why cant you make biodegradable cups I dont want to see Bangladesh rural areas littered with plastics just because we sold yogurt. They said well we will have to do some research. I said go out and do the research. So they went out around the world to figure out how to make biodegradable cups

Finally they come back very excited, we have found it where what. In China, cups made of corn starch –very good material, which satisfies all of our conditions, and they brought some cups made of corn starch. And I said can I eat it. Why should you want to eat it. Because poor people are paying for it, why should they pay for something which they have no use for. Why cant you find a material that kids can eat alongside the yogurt.

Their money shouldnt be wasted, They said we cant find this thing; I said you’ll find it. I said when I buy ice cream I get a cornet. And I love cornets. Why cant you find something like that. They said no cornets wont work. I said find the one that will work because that cup should also carry nutrition as they are paying for it. So finally they got convinced and said that they would ask their research facility in Paris. We will give the task to our scientist to find it. I said how long will it take. They said a year or so. I said can we make it 6 months. Because otherwise there will be useless expenditure on these cups people will be making but with no nutrition.

The reason I mention all this is that the moment you design something as  a social business a lot of other issues come up. In the profit maximising business you dont see that because you are busy to make the money, the bigger you make the container the bigger it is the more money you make ,so  you make it bigger unnecessarily, you spend a lot of money on packaging just to lure you are in , you dont get anything out of it but they get the money in the process you waste resources. So if you fix the concepts and the institutions nobody will be a poor person in the world, so we can create a world free of poverty. And then I say the only place we will see poverty will be poverty museums.

We will build a museum in London where they will show where poor people used to live in this country, and now there is no poor people in this country! And similarly in many other countries. And let’s fix the date on which we will inaugurate the museum in each Future Capital and country.

Global Sectors where community-based marketing social businesses are way ahead than image-led businesses


Green Energy

Internet Leapfrogging



Download -sampler of readings from Creating a World Without Poverty - Social Business, Future of Capitalism , Yunus, 2007

.Contact Made- Institute/Person/date/ApproachResponse..Other Notes||Monthly Top 3 Future Capitalism News relevant to SMBA studies
.CA: Claremont Drucker Institute, Rick Wartzman: email & telRick phoned; said he would talk to Ira ; believe lot of synergy between Peter Drucker's perspectives & Yunus -BusinessWeek article: The Nobel Peace Prize winner's drive to help the poor through microfinance is a shining example of Drucker's principles in action .Los Angeles Book transcript Jan08- see below; Drucker lifelong supporter of start with small entrepreneurial systems|J8.1|Launch of Future Capitalism book: features Grameen Danone as world’s first multinational social business & explains how social business model has been validated from 30 years of developing the microcredit banking sector
.LSE : Globalisation governance group...
Vanderbilt - margaret blair : scholar of law & unswen wealth...

Types of resources:
relevant youtube library 1



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Alibaba founder Jack Ma unveils ambitious plan

Mission: 100 million new jobs

By Dana McCauley

He already runs the world's biggest online shopping company, but Alibaba founder Jack Ma is not satisfied.

The Chinese billionaire has unveiled an even more ambitious plan to expand the company's reach across the globe, creating 100 million new jobs and transforming the global economy to create a more equitable world.

It may sound pie-in-the-sky, but the goal forms part of mission statement of the US$261 billion company's visionary executive chairman.

In a letter to shareholders, Ma outlined Alibaba's achievements of the past financial year - including a gross merchandise turnover of more than $195 billion (1 trillion RMB), an "unprecedented" figure - before looking to the future.

"We have more than 430 million annual active buyers, which means one out of every three individuals in China has made a purchase on our retail marketplaces," Ma wrote.

But, he said, while proud of Alibaba's online shopping achievements, "we want to do far more", saying that the benefits of globalisation had not been spread evenly, but that "digital disruption will bring us closer to a level playing field for young people and small businesses".

"We are not merely trying to shift buy/sell transactions from offline to online, nor are we changing conventional digital marketing models to squeeze out a little additional profit," he wrote.

"We are working to create the fundamental digital and physical infrastructure for the future of commerce, which includes marketplaces, payments, logistics, cloud computing, big data and a host of other fields."

The Alibaba group of companies, founded in 1999, accounts for 60 per cent of all Chinese online sales, and this year overtook Walmart as the world's largest retailer.


It has made Ma the second richest man in Asia, with a net worth of US$28.5 billion.


It's through cloud computing that Alibaba aims to expand its reach, and the company has been investing in the technology as part of a strategy that sees shoppers' data as the contemporary equivalent of mineral riches.

"Over the next 30 years, with computing power as the new 'technology breakthrough' and data as the new 'natural resource,' the landscape of retail, financial services, manufacturing and entertainment will be transformed," Ma wrote, forecasting a decades-long period of transformation.

"The internet revolution is a historical inflection point, much like when electricity was introduced, and it may have an even greater impact," he predicted.

Alibaba's mission, he said, was to "empower merchants with the ability to transform and upgrade their businesses for the future" and "help companies all over the world to grow".

"We believe, the commerce infrastructure we have created in China - marketplaces, payments, logistics, cloud computing and big data, all working in concert - can be applied on a global scale to lift up small and medium businesses and ordinary consumers around the world."

Eight years after launching, Alibaba Cloud hosts 35 per cent of Chinese websites, while delivering cloud computing and big data services.


Ma said Alibaba was constantly adapting to the changing e-commerce environment, as staying at the forefront of innovation was key to its continued success.

"In the coming years, we anticipate the birth of a re-imagined retail industry driven by the integration of online, offline, logistics and data across a single value chain," he said.

"With e-commerce itself rapidly becoming a "traditional business," pure e-commerce players will soon face tremendous challenges."

A shift to mobile revenue was one such change, he said, with mobile climbing from a single-digit percentage to three-years of total revenue from Alibaba's Chinese retail marketplaces, in the space of two years.

"This is why we are adapting, and it's why we strive to play a major role in the advancement of this new economic environment," Ma said.

Innovations like Alibaba's Qianniu app, which helps online businesses to improve sales and marketing while enhancing efficiency, were an example of the type of projects the company aimed to focus on.

"In 20 years, we hope to serve two billion consumers around the world, empower 10 million profitable businesses and create 100 million jobs," Ma said, adding: "This will be an even more difficult journey than the one behind us."

LISTEN : Newstalk ZB Political Editor Barry Soper speaks to Andrew Dickens on KPMG Early Edition

Mr Ma - who's worth around $50 billion - met with John Key in Beijing late yesterday. He made his money through founding the online commerce platform Ali Baba.

Standing alongside the Prime Minister, he heaped praise on the country, which he says is loved by many Chinese.

"At least 20 of my colleagues retired from Ali Baba. They're all very young, in their 40s, they all go to New Zealand."

"I asked what they do apart from the golf and green things and they say it's the people there."

It wasn't all social, with the Chinese billionaire also talking business.

Jack Ma told the entrepreneurs luncheon Kiwi businesspeople find it difficult to access the Chinese market.

Mr Ma said he wants to make that easier with his multi-platform organisation.

"We have Ali Baba University. We would either have courses in New Zealand or invite the entrepreneurs in New Zealand to stay in China for two weeks for training."

"The second is that we're going to open an Ali Baba business embassy next year in New Zealand."

John Key is in China meeting business and political leaders.



Innovation "Made in China" - The Case of Alibaba and the role of Net-based Small Business

Innovation is a key driver for economic development and social progress and small business is one of the best ways for people to express their willingness and capability to innovate.  Pervasive business ownership has, therefore, been the foundation in many societies for the continued improvement of people’s economic wellbeing. In the People’ Republic of China, however, private business ownership was prohibited between 1957 and 1978. Productive innovations were extremely restricted and as a consequence, China’s economy was on the verge of collapse by the end of 1978. The Chinese people had suffered a historic setback.

Alibaba’s growth, driven by unleashing grassroots entrepreneurship, has become an exemplar of China’s innovation in the 21st century.  Started by 18 young people in 1999, Alibaba has grown into a giant global internet platform and has made many invaluable contributions to China’s progress. Highlighting the importance of pervasive small business ownership in unleashing grassroots innovation and improving economic wellbeing, Professor Lowrey will discuss Alibaba’s innovative strategies and explain the economic theory behind its inspiring success.




Dr. Ying Lowrey is Professor of Economics at Tsinghua University and Deputy Director of the Tsinghua Research Center for Chinese Entrepreneurs, and a member of the Academic Committee for Alibaba Group Research Institute. Her teaching and research interests include economics of innovation and entrepreneurship in the internet and platform economy, the modern microfinance market, business demographics, characteristics of business owners, and the role of free enterprise and competition in the macroeconomy. 

She received her economics Ph.D. from Duke University, economics MA from Yale University and mathematics BS from Wuhan University. Before joining Tsinghua University in 2012, she served as senior economist at the Office of Advocacy, U.S. Small Business Administration and has taught economics at George Washington University and San Diego State University.


Selected publications 




Founder of Ali Baba commits his work for Chinese on internet to generate 100 million microentrepren…chris macraeNov 23, 200950 views

Founder of Ali Baba commits his work for Chinese on internet to generate 100 million microentrepreneur jobs in 2010s - who else would you vote at the centre of 100 million job creation leagues?
=====================update sumer 2016:
unlike oiher years spent with bangaldeshi inspired youth, i spent 2015-2016 mainly with a class of chinese female students - what brilliant minds and tirelss sources of human energy - i hope this summary of why the whole world can celebrate what jack ma is doing is near to the mark - but as always look forward to editing any errors which are mine alone washington dc text 240 316 8157
was english language tutoring

In 1995 he was sent to the usa on an exchange mission and encountered the worldwideweb - then unknown in China. He determined the www would be the biggest job creating innovation of his (or his generations) life and hopefully of every Chinese entrepreneur he could valuably link into.

Over the next 15 years his wizard coding teams went from something that was little more than an electronic yellow pages for small businesses to conceiving sustainability generation's 2 greatest retailing platforms china or the world may ever have seen..

the taobao platform is the most valuable job creating concept retailers have ever mediated because it reverses the western trend of globalisiation of retailers, bankers and big corporations squeezing out local and small enterprises from having a market; how taobao did that is an extraordinarily detailed story but note how Ma was concerned to ensure even the most cut-off of Chinese villagers could start up on tao bao (rural ecommerce is one of the innovations that Ma has led the www purpose to linkin)

His other mall was pitched at the more usual high cost fashions of big global merchandisers. Because of complex property laws in chinese cities, most expensive retailers are not much of a joy to shop in. So ali baba created a lifestyle -eg celebrate singles day 11/11 shopping virtually rather than the physically exhausting interaction in The West's biggest shopping days of the year)

SO 365/24/7 consumers of ali baba can choose who they value developing most with their purchasing power as well as searching merchandise with global image or local cultural joy

Alibaba has become china's and probably the word's largest retailing channel. It does this with next to no merchandise but brilliant coding so that every store front on its platforms delivers with equal reliability. Hunting out exactly how Ma forms partnerships so that big data analysis benefits the smallest enterprises and most local consumers ought to be a job of whomever is sustainability goals greatest economist.

Intriguingly to ensure he could compete with the chinese internet companies that raced to co-create the www that Ma had opened space for in china, Ma IPO'd Alibaba through a process 2010-2015 while developing his secret sustainability weapon under private ownership. AlIpay is china's number 1 financial inclusion delivery system and maybe global youth most humanly productive coding achievement to date.

Comparing china's top 10 internet properties with the west's is very interesting. Are the consuming behaviours on ali baba more sustainable than those on amazon or ebay or paypal? Are the learnng behaviours on baidu more sustaining of youth than on google or coursera or microsoft's linkedin. Time will tell but note how speaking english, chinese and coding (as well as mother tongue) are probably what educators anywhere on planet earth should NOW be most valuing their global youth's future freedom to thrive entrepreneurially around.

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