Review of Environment, Energy and Economics - Re3 Profit-Not for Profit Convergence to Achieve Sustainable Value. A Conversation with Muhammad Yunus


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Profit-Not for Profit Convergence to Achieve Sustainable Value. A Conversation with Muhammad Yunus
by Muhammad Yunus
Economics - Interviews

On July 3, 2015, FEEM, in collaboration with Fondazione Italiana Accenture (FIA) and ACCR-ACCS Foundation, organized and hosted the workshop “Convergence between profit and not for profit to achieve sustainable value. Perspectives from the Social Enterprise World Forum 2015”, within the Social Enterprise World Forum on “Growing a New Economy” held in Milan (July 1-3, 2015).

The keynote speech by Nobel Prize laureate Muhammad Yunus, founder of Grameen Bank, was preceded by a preparatory round table on the value of sustainable development and the role of organizations for the "Post 2015” Agenda with a panel of experts (Piercarlo Gera - Global Managing Director, Accenture Strategy Financial Services, Enrico Giovannini - Independent Expert Advisory Group on the Data Revolution for Sustainable Development, UN and Giulio Sapelli - University of Milan and FEEM). The debate was introduced by Sabina Ratti - FEEM Executive Director - and Diego Visconti  - Chairman, Fondazione Italiana Accenture - moderated by Monica D’Ascenzo - Il Sole 24 Ore - and closed by Elena Casolari -  CEO, ACRA-CCS.

Professor Yunus started his speech by retracing the story of Grameen Bank [Note 1] and recalling how the microcredit concept came to him in 1974, “The beginning of microcredit, the idea of lending money, came out of desperation, not out of serious planning. The situation was so bad [Note 2] you wanted to do something, so you would do it without any thinking, there was no thinking behind it. It was the situation of loan sharking, the extreme situation of people lending tiny money and grabbing everything from the borrowers, from the poor people, particularly women. I watched it, because I visited the village every day, it was next to the University campus, and I saw how ugly it was. I felt so small. I couldn’t do anything, and it happened right in front of me. Then suddenly it came to my mind that I could do something. I could not solve the problem of the whole world, but I could solve the problem of a few people in this village. And the solution that came to my mind was simple. Why don’t I lend the money myself, instead of writing a book about it expressing my anger, why not go straight ahead and do it? So I started lending the money out of my own pocket. It was just a small amount of money, so it didn’t bother me, and I thought this is easy. I can protect the people from the loan sharks by lending them the money myself, so that was the beginning in 1976. And it grew and grew, and as it grew my money was running out, so I thought I should go to the bank to see if they could take over from me. But the banks said, no way we can do that, so after several months I offered myself as a guarantor. I said, I will become the guarantor. I’ll sign all the papers, you give them the money. If they don’t pay back, I’ll pay back. So that became the second phase. As the bank grew, the bank became very reluctant to give me money. So I said, forget about the bank, now that I see it’s working why don’t I create my own bank? So another phase began, to try to persuade the regulatory authority to allow me to set up a bank. In 1983 we became a bank called the Grameen Bank. It started expanding so it became a nationwide bank. The special feature of the bank is that it is a bank which lends money exclusively to poor people. It doesn’t do other business, just lending money to the poor people and taking their savings. And savings became part of the ritual. Every week, every borrower had to save something. Even a penny, but they had to put something in their savings account. So it became a habit. Initially it was very small, but then we grew….”

Grameen Bank has now over 8.5 million borrowers, 97% of whom are women who take tiny loans to start businesses of their own, such as raising cows, raising chickens, doing handicraft, doing some vegetable growing, activities with which they are familiar.

Professor Yunus reports that, as Grameen Bank grew, “We started looking at other issues, health issues and other issues. We wanted to make sure the children of Grameen families would not become illiterate like their parents….” Grameen Bank now ensures that Grameen children get an education, and “thousands and thousands of them have become professional people”.

Many other businesses were also created, such as insurance coverage, health insurance in particular, and pension funds. Grameen people were encouraged to create a monthly income out of their own money, not with the State, they created their own pension fund.

Grameen Bank also set up a joint venture with Glasgow Caledonian University to create the Grameen Caledonian College of Nursing. "The students don’t have to pay money for their nursing education. Grameen Bank gives them everything as a loan. When they finish their education they get very good jobs, and they pay one fourth of their salary and pay back the entire loan in 3 years. They don’t mind it because their salary is very high. They come from villages where they don’t speak English. So the first year of college is devoted to learning English and computers and nursing terms, so by the time they come out they speak fluent English and they are very good at the Internet. Every year some nursing students go to the Glasgow Caledonian University so they can get their master’s degree. This is designed as a business, so that it is not dependent on charity. Grameen Bank gives the loan, the college pays all the expenses and the graduates pay back all the money".

Business to solve problems without the intention of making money personally. That’s what we define social business”, states Professor Yunus, who describes the two basic conditions for social business:

  • social business is "business where investors don’t make profit. Investors get back their money but there is no profit. Profit is ploughed back into the business".
  • social business "must solve a human problem".

Another example of social business is the Prevention of Cataract Blindness Project launched in 2001 to improve the situation of poor people with cataract, which was a serious problem in Bangladesh. At that time only  the capital city had an eye hospital, and Professor Yunus wanted to make sure that people living in remote villages could be treated.

In 2007 the first Eye Care Hospital structured as a Social Business Enterprise was established in Bogra. Other eye hospitals were later established in the country on the basis of the same principle.

Professor Yunus closed his speech by stressing the fact that any business can run a parallel social business. In Grameen Bank, for example, "selflishness" and "selflessness" were combined in the same business. Selfishness is used to make money, while selflessness is used to help solve a problem.

Unless we address our problems this world is not going to survive”, stated Professor Yunus, who ended his presentation by explaining his vision of a world of three zeroes:

  • Zero poverty: "no one in the world should be a poor person".
  • Zero unemployment: "there should be zero unemployment". Professor Yunus explains that there is no reason why anybody should be unemployed. “Human beings are go-getters, they do things on their own, they are very creative. Creating employment is not a solution to unemployment. Creating entrepreneurship is the solution to unemployment, which is an artificially created problem". People must be encouraged to become entrepreneurs, like the women who borrow the money from Grameen Bank.
  •  Zero net emissions, "so that the net carbon emissions should be zero and we can achieve that".

In Professor Yunus’ view, this is the direction that all our businesses and thinking should follow, “Together we can make it happen”.


[Note 1] Grameen bank means "village or rural bank" in Bangla language.
[Note 2] Reference is made to the village of Jobra near Chittagong University where Professor Yunus had led his students for a field trip.



Streaming of the Workshop - Conversation with Nobel Prize Laureate Muhammad Yunus



After his speech, Professor Yunus granted Re3 an interview to answer the following questions:

  1. How could the non-profit sector maximize its impact by working along with the private sector?
  2. Vice versa, how could companies enhance their own “social impact” by working with the third sector?
  3. What kind of governance structure is needed in order to manage private-public partnerships, increasingly considered as an essential tool for sustainable development?

Interview with Nobel Prize Laureate M. Yunus: "Convergence Profit - Non Profit & Sustainable Value"










Muhammad Yunus, economist and founder of Grameen Bank, Nobel Prize Laureate in 2006