Creating a World Without Poverty
Muhammad Yunus’ new book is not only an inspiring addition to the successes of his first, Banker to the Poor, which went through the historical formation of micro-banking enterprises owned by poor, Bangladeshi women. His newest book, Creating a World Without Poverty, describes the off-shoots of micro-enterprise companies from the Grameen Foundation, that unlike their micro-banking predecessor are what Muhammad calls “social businesses”. These social businesses range from health-related companies providing eye care to cell phones and IT providers.
Social businesses are different than any other form of business; they are neither for-profit making companies nor do they receive tax-exempt status like non-profit organizations. Muhammad states that, in many ways, social businesses are the wave of the future, where this new kind of business can be introduced into the marketplace “with the objective of making a difference in the world.” Social business still work with investors, but they do not receive dividends like for-profit companies. This makes a big difference in the business’ bottom-line. In a for-profit company, their primary objective is maximizing profits and giving investors large returns or dividends. In a social business, profit is “ploughed back into the company to expand its outreach and improve the quality of its product or service.”
Muhammad is not just known for winning the Nobel Peace Prize for his work with micro-banking and the President of the wonderful Grameen Foundation, but he is co-founder of the largest social business known in the world, Grameen Danone. This social business was created by a joint-venture between Danone (France-based yogurt company) and Grameen Bank. This social business brings healthy, fortified yogurt to rural Bangladesh communities. The concept behind this social business was not only to provide additional nutrition to youth of Bangladesh that are in dire need of such assistance, but creating a business that works with the local community to achieve their success. For example, Grameen-Danone works with local dairy farmers who provide the factory with high quality milk and employs “yogurt ladies” who distribute yogurt to local villages and markets. This form of social enterprise has brought welcome development income from micro-enterprise to many local village populations surrounding Grameen-Danone factories. In social business the end goal is a social goal and that is the biggest difference between social business and for-profit businesses.
For some reason, fair trade was not mentioned as an already widely recognized social business in concept. Maybe Muhammad is waiting for his third book to integrate fair trade’s principles into the mix?! Fair trade certainly matches the concepts behind Muhammad’s social business ideals.
admin @ February 5, 2008