Muhammad Yunus: “The future belongs to social business”

07.07.2011

The idea by Prof. Muhammad Yunus, an economist from Bangladesh, of helping the world’s poorest people to help themselves out of their situation by offering them microcredits won him the Nobel Peace Prize in 2006. He is strongly in favour of business-motivated and socially-oriented development ideas like that of the Aid by Trade Foundation and its initiative Cotton made in Africa. He is firmly convinced that “the future belongs to social business”.

Muhammad Yunus is regarded by many people worldwide as the advocate of the poor. Grameen Bank, founded by him in Bangladesh in 1983, offers microcredits to the poorest people in the country so that they can start a business and earn their living independently. The bank has now tendered loans to more than 7.5 million credit recipients. Most of them are women, and the loans are sometimes as little as five dollars. Often that is all that is required. “To give handouts to people merely deprives them of any motivation to help themselves. The aim must be to help people to become independent,” says Professor Yunus.

Yunus’ idea remains one of the main instruments for poverty reduction. He points out that the economic interest should not focus on profit maximisation but on the greatest utility for the people concerned. “Only when social values are established in the market economy it will function for the poorest of the poor.” The 71-year-old expert firmly believes that social business will continue to develop in the future.

The profit earned by a company is given back to those who have created it within a social business — as with the Cotton made in Africa initiative, which transfer their profit by offering trainings and paying profit dividends for participating farmers.

During his visit at the Aid by Trade Foundation 7th of July 2011 Yunus underlines that Cotton made in Africa impressively demonstrates how a social business helps the poorest of the poor to help themselves: “The initiative is a win-win situation for the participating smallholders and Demand Alliance partners and shows how socially compatible trade with developing countries can work for the benefit of all concerned.”

On the occasion of his travel to Hamburg Prof. Yunus discussed about the principles of the social business idea with the employees of the foundation and informed himself about the progress of the Cotton made in Africa initiative.