Millions of miracles

2007 Nobel Peace Prize Laureate Professor Muhammad Yunus explains why social business enterprises are critical to ending poverty.

Despite many advances global poverty persists. Models that rely on government action or capitalism narrowly defined as maximization of financial profit are limited in their ability to put poverty where it belongs – in a museum. The key missing links are grassroots, private sector approaches that focus on the poorest of the poor, but in a way that is businesslike and allows for preservation of investor capital and financial sustainability over time. The potential of ‘social business enterprises’ formed along these lines can make a major impact on the global poverty crisis.

The Grameen Bank project, a for-profit, member-owned bank since 1983, shows that providing microcredit to the poor can be done in a successful and profitable manner. Today we have more than seven million borrowers, and 58% of them have already crossed the poverty line and most of the rest are heading in that direction. They have done this through their own efforts, supported by microcredit, microsavings, microinsurances, and a social development programme guided by the ‘16 Decisions’ that our clients developed in 1984.

The Grameen Bank is profitable and can expand in Bangladesh with savings provided by the poor (and formerly poor) borrowers and other savers. While the Grameen Bank does not need additional support, other programmes in other countries will benefit from support, and Bangladesh can benefit from additional social business investments that improve the lives of the poor.

One example of a social business investment is the joint venture with the Danone Group of France (famous for its yogurt products) that will produce and sell fortified yoghurt especially formulated for malnourished children in Bangladesh. Another is the eye care hospitals that will bring world-class eye care to all levels of the Bangladeshi population with the poor paying less and the richer paying more for identical high-quality services.

I have always maintained that poverty was not created by the poor, but by society’s institutions that became a ‘disabling environment’ for them. The Grameen Bank became an ‘enabling environment’ that led to millions of small miracles which, collectively, provide an example of what can be done globally.

That the Nobel Prize was awarded this year half to me and half to the Grameen Bank to recognise our progress, makes us more committed to reaching new poverty-reduction milestones in the years ahead.