By Professor Sophie Bacq
On April 6, 2016, years after I started studying and closely following his work, I had the great pleasure to meet Nobel Laureate Dr. Muhammad Yunus. Grameen Bank’s founder, whose work has been recognized by more than a hundred awards and 48 honorary degrees from 26 different countries, shared with us his reflections on social entrepreneurship, microfinance and social business during a “conversation” organized by the New England Council in Boston. I would like to take this opportunity to share key take-aways and my personal reflections on this truly inspiring and humbling moment.
- “Bumping into” opportunities
Whereas entrepreneurship theory teaches us that opportunities can be recognized, discovered, or created (e.g., Sarasvathy et al., 2003), the nature of social entrepreneurship opportunities differs from their commercial counterpart (e.g., Zahra et al., 2008). While recounting the story of the creation of Grameen Bank, Dr. Yunus recalled that he “bumped into” microfinance. He did not deliberately engage in an entrepreneurial process, nor did he plan on starting a venture. What led him to lend $27 to a group of 42 women in the village he was crossing everyday on his way to campus, was an “act out of desperation.” It became self-evident to him that villagers in rural Bangladesh, women in particular, needed access to financial means in order to get out of poverty. As such, when he disbursed his first loan, Dr. Yunus had certainly not envisioned that four decades later, Grameen Bank would be lending 2 billion USD to 8.5 million active borrowers. But he could not, and did not, stop there!
- Entrepreneurs as “problem-solvers”
Social entrepreneurship opportunities are defined by the people and their problems. “Everybody’s problems are, by nature, societal problems,” says Dr. Yunus. As such, once Grameen Bank was reliably serving its borrowers by giving them access to financial services such as loans, savings accounts and insurance, Dr. Yunus wished to further improve the lives of these borrowers and their families. Quickly, he realized that many of their children suffered from night blindness, which is a sign of vitamin A deficiency. He did not wait long to start a venture to address that issue. In another instance, when he realized the blatant lack of sanitation in some of the Grameen communities, Dr. Yunus required prospective borrowers to build a basic toilet in their village before receiving their first loan. Moreover, in order to provide for elderly women, often economically vulnerable, Grameen Bank set up a pension plan for which it matches the amount that women put down every week. In another program, Grameen participated in the transformation of 25,000 formerly generational beggars into entrepreneurs—they became door-to-door salespeople. Furthermore, in response to a lack of access to equitable healthcare, Grameen elected to provide not only health insurance (4 USD per year for a family) but also the medical care. To date, Grameen has established 50 clinics which are all self-reliant. And when they faced a high turnover among doctors who were reluctant to stay in the villages, Dr. Yunus did not give up and instead reoriented his strategy: Grameen decided to empower the nurses and launched a nursing college, which is now ranked among the best ones in the country.
- Starting up “non-dividend companies for human principles”
The recognition of ubiquitous societal problems and the design of creative solutions was the starting point for the concept of “social business.” Dr. Yunus defines a social business as a “cause-driven business in which the investors/owners can gradually recoup the money invested, but cannot take any dividend.” The purpose of the investment is purely to achieve one or more social objectives through the operation of the company, so that no personal gain should be desired by the investors. Examples of social businesses include Grameen Danone, a joint venture between Grameen and Group Danone to create a yogurt fortified with micronutrients to decrease child malnutrition in Bangladesh; Grameen Veolia that strives to make clean and safe water accessible to villagers in the poorest parts of Bangladesh; or Grameen Intel, an information technology venture enabling rural entrepreneurs to provide services in their local communities. Dr. Yunus is a big believer in technology being the solution to a lot of societal problems. As he shared with us that day, “every problem has a solution… technology is the solution.”
- “We are not job seekers, we are job creators”
Finally, Dr. Yunus reiterated the critical importance of entrepreneurship to address our society’s most complex issues. According to him, the idea of “looking for a job” is becoming obsolete. Rather, the next generation of changemakers has to see themselves as “job creators.”
So, to the social entrepreneurs of tomorrow, I wish you to be as passionate, committed and resilient as Muhammad Yunus when you engage in your compassionate endeavors.
