Building Social Business

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BULDING SOCIAL BUSINESS Social business is a non-loss and non-dividend company dedicated entirely to achieve a social goal. Muhammad Yunus, a Bangladeshi banker. Economist, founder of Grameen bank and Nobel Peace Prize recipient explains in his book what social business is and how it can help the development of our communities. Yunus, previously was a professor of economics where he developed the idea and concepts of micro-credit and micro-finance. In the early seventies, Bangladesh was in a terrible state; the aftermath of the war of liberation (which started on 26 March 1971 and ended 16 December 1971) with the destruction caused by the Pakistani army combined with floods, droughts, and monsoons to create a desperate situation for millions of people. During this war, Bangladesh suffered a vast amount of famine and this country did not improve; at this time Yunus was teaching at Chittagong university where he was teaching economics but there wasn't a great enthusiasm because everyone in the city was dieing of hunger and noticed that as an academic he wasn't solving global problems. In trying to discover what he could do to help; he learned many things about the poor people who lived in Jobra, a village in Bangladesh; he came face to face with the struggle of the poor people to find the tiniest amounts of money needed to support their efforts to eke out a living. He met a woman who buys bamboo to craft stools; this woman had borrowed just 5 taka (the equivalent of around 7 Cents in U.S currency) from a moneylender and trader. The interest rate on such loans was very high, she would have to also sell all her products to the moneylender at a price she would determine. Realizing that there must be something terribly wrong with the economics he was teaching, Yunus took matters into his hands, he made a list of the people who had borrowed from the moneylenders; to free these borrowers, he reached into his own pocket and gave them the money to repay their loans. The first thing Yunus did was to try to persuade the bank located in the university campus to lend money to the poor, but his request was met with a strong and clear objection. The bank manager stated that “ Poor people are not bankable; which means that they are not creditworthy”. He met with senior banking officials at various levels to see if he could find someone who would be willing to open the doors of the bank to the poor, but he wasn't able to change their minds. Determinately, he came up with an idea, he offered to become a guarantor for loans to the poor. After much hesitation, the bank agreed to accept his proposal. He started giving out loans to poor people signing all the papers the bank gave him to guarantee the loans were paid back. In other to make sure, the poor borrowers would find it easy to pay back the loans, he came up with simple rules, such as having people repay their loans in small weekly amounts, and having the bank officer visit the villagers rather than making the villagers visit the bank. Finally, Dr Yunus decided to create a separate bank geared to serve the poor which

is called GRAMEEN BANK (village bank) which came up with the following objectives: To extend banking facilities to poor men and women; eliminate the exploitation of the poor by moneylenders; create opportunities for self-employment for the vast multitude of unemployed people in rural Bangladesh; Bring the disadvantaged, mostly the women from the poorest households, within the fold of an organizational format which they can understand and manage by themselves; and reverse the age-old vicious circle of “low income, low saving and low investment”, into virtuous circle of "low income, injection of credit, investment, more income, more savings, and more investment". Grameen bank is a nationwide bank serving the poor in every single village of Bangladesh. Of its 8 millions borrowers, 97 percent are women. Grameen bank mostly focuses om women. Yunus saw that women in Bangladesh...
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