Skip to main content
Part of complete coverage on

My journey to help the poor and build a more equitable world

By Muhammad Yunus
November 15, 2013 -- Updated 1719 GMT (0119 HKT)
Women borrowers at a gathering in a village in India. Microfinance has affected the lives of about 1 billion people.
Women borrowers at a gathering in a village in India. Microfinance has affected the lives of about 1 billion people.
STORY HIGHLIGHTS
  • Muhammad Yunus: I started Grameen Bank with the simple idea of helping the poor
  • Yunus: Today, microfinance has affected the lives of about 1 billion people worldwide
  • He says social business focuses more on solving social problems and less on profit
  • Yunus: We need to re-evaluate capitalism, empower the poor and build a better world

Editor's note: Muhammad Yunus, a Nobel Peace Prize laureate, is founder of Grameen Bank and more than 50 other companies. He is author of "Creating a World Without Poverty: Social Business and the Future of Capitalism" and has received the U.S. Presidential Medal of Freedom and the Congressional Gold Medal. This is one in a series of columns CNN Opinion is publishing in association with the Skoll World Forum on people who are finding new ways to help solve the world's biggest problems.

(CNN) -- When I started my initiative that led to the creation of Grameen Bank, my ambition was small and simple -- to help the poor people in Jobra, a village in Bangladesh. I thought if I could give them access to a small amount of money, maybe their lives could change for the better. I never imagined the scale of impact that idea would have today.

Watch video: Yunus on how we can create social fiction

Muhammad Yunus
Muhammad Yunus

I began my work in the 1970s when I was teaching at a university in Bangladesh. The economic theories that I had learned stopped ringing true for me when I saw the misery of people all around me. I decided that I would drop the theories and go out to see if I could help just one person a day in the village outside of the university.

After talking with some women, I found out how they became victims of money lenders in carrying out their livelihood pursuits. They were forced to pay exorbitant interest rates and subjected to other oppressive terms on the tiny loans they were given.

I thought I can protect them by offering the loans myself. I gave 42 people a total of $27 of my own money as loan to solve their problems. They used that to free themselves from the loan sharks and were able to pay me back later.

From this tiny experience, Grameen Bank was born. Over the course of three decades, through this bank, we lent to more than 8.4 million borrowers in Bangladesh, giving them fair loans and a fair chance to climb out of poverty.

Unlike banks in the traditional system, Grameen works on the assumption that even the poorest of the poor can manage their own financial affairs given the right conditions.

'Banker of the Poor' transforms lives
Yunus: Pay Bangladeshi workers more
Father of microfinance opens banks

Starting loans are about $40. Today, the average loan is just about $200 and our repayment rates are at 97%. Our borrowers are mainly women (97%). They own this bank by buying shares of the bank with funds from their savings accounts in the bank. This system was designed to ensure that the bank focus on alleviating poverty as well as its commitment to addressing the needs of its clients.

Microfinance is now a well-known term. It has evolved on a much larger global scale with microfinance institutions to extend loans to more than 160 million people. It has affected the lives of about 1 billion people in developing countries.

During my journey to build up Grameen Bank, I also created many other self-sustaining enterprises to address the problems faced by the people we worked with -- the rural poor. That was the start of social business -- a new type of business that focuses on solving social problems, rather than just making money, which I later elaborated in my book, "Creating a World without Poverty and Building Social Business."

A social business offers an alternative to the capitalist model.

The essence of social business is to create a business that is focused on solving human problems rather than making a personal profit. It is a nondividend company designed to address a social objective within the framework of existing marketplace. It is different from a nonprofit because the business should seek to generate a modest profit, which would be used to expand the company's reach and improve the product or service. Social business has to be sustainable and is able to return the amount invested. But investors do not receive any further dividend after that point.

I have created many such enterprises. In recent years, many international businesses became interested in collaborating with us -- including Danone, Veolia, BASF, Uniqlo, McCain, BR Foods and Intel. We set up joint ventures with them, making use of their technological expertise to solve problems such as malnutrition, unclean drinking water, mosquito-borne diseases, unemployment and maternal health issues.

We also created some successful standalone social businesses such as Grameen Shakti, which supplies solar energy to off-grid villages, and Grameen Eye Care Hospital, which provides affordable cataract surgeries and other eye care treatments in rural areas. Glasgow Caledonian University has teamed up with us to establish a nursing college, offering tertiary education to rural village girls.

In 2010, I met Saskia Bruysten who, coming from a management consulting background, shared in the belief of bringing a business approach to solving social issues. Together we created Yunus Social Business, an incubator fund that lends to social business entrepreneurs around the world.

YSB's concept is simple. We select the most promising business plans created by local people that are designed to solve local problems in a sustainable way. After recouping the initial investment, all profits will be reinvested into the business or used in some way to benefit the customers.

YSB makes investments in such businesses through its fund and takes no profits. Everything goes back to the community.

Since 2011, YSB has grown rapidly and is operating in eight countries (Haiti, Albania, Brazil, Costa Rica, Colombia, India, Tunisia and Uganda).

With the world population crossing 7 billion people, it is more crucial than ever that we re-evaluate the concept of capitalism. Will we continue to sacrifice the environment, our health and our children's future in the relentless pursuit of personal profit and power? Or will we take the destiny of the planet into our hands by reimagining a world where we put the needs of all people at the center? Will our sustainable business model without seeking personal profit become a means to achieving those needs?

I have come far on my journey from lending $27 to 42 people in Jobra. But my ambition remains the same: Can I empower the poor to change their circumstances and bring the power of business to solve problems by reorienting people from profit-seeking to enjoying the pleasure of being a creator of a better world? This is the mission of Yunus Social Business and the journey I continue.

Follow us on Twitter @CNNOpinion

Join us on Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Muhammad Yunus.

ADVERTISEMENT
Part of complete coverage on
September 1, 2014 -- Updated 1221 GMT (2021 HKT)
Carlos Moreno says atheists, a sizable fraction of Americans, deserve representation in Congress.
August 31, 2014 -- Updated 1625 GMT (0025 HKT)
Julian Zelizer says Democrats and unions have a long history of mutual support that's on the decline. But in a time of income inequality they need each other more than ever
August 31, 2014 -- Updated 0423 GMT (1223 HKT)
William McRaven
Peter Bergen says Admiral William McRaven leaves the military with a legacy of strategic thinking about special operations
August 29, 2014 -- Updated 1611 GMT (0011 HKT)
Leon Aron says the U.S. and Europe can help get Russia out of Ukraine by helping Ukraine win its just war, sharing defense technologies and intelligence
August 29, 2014 -- Updated 1724 GMT (0124 HKT)
Timothy Stanley the report on widespread child abuse in a British town reveals an institutional betrayal by police, social services and politicians. Negligent officials must face justice
August 30, 2014 -- Updated 0106 GMT (0906 HKT)
Peter Bergen and David Sterman say a new video of an American suicide bomber shows how Turkey's militant networks are key to jihadists' movement into Syria and Iraq. Turkey must stem the flow
September 1, 2014 -- Updated 1554 GMT (2354 HKT)
Whitney Barkley says many for-profit colleges deceive students, charge exorbitant tuitions and make false promises
August 29, 2014 -- Updated 1434 GMT (2234 HKT)
Mark O'Mara says the time has come to decide whether we really want police empowered to shoot those they believe are 'fleeing felons'
August 28, 2014 -- Updated 1432 GMT (2232 HKT)
Bill Frelick says a tool of rights workers is 'naming and shaming,' ensuring accountability for human rights crimes in conflicts. But what if wrongdoers know no shame?
August 29, 2014 -- Updated 0243 GMT (1043 HKT)
Jay Parini says, no, a little girl shouldn't fire an Uzi, but none of should have easy access to guns: The Second Amendment was not written to give us such a 'right,' no matter what the NRA says
August 30, 2014 -- Updated 1722 GMT (0122 HKT)
Terra Ziporyn Snider says many adolescents suffer chronic sleep deprivation, which can indeed lead to safety problems. Would starting school an hour later be so wrong?
August 29, 2014 -- Updated 1330 GMT (2130 HKT)
Peggy Drexler says after all the celebrity divorces, it's tempting to ask the question. But there are still considerable benefits to getting hitched
August 29, 2014 -- Updated 1849 GMT (0249 HKT)
The death of Douglas McAuthur McCain, the first American killed fighting for ISIS, highlights the pull of Syria's war for Western jihadists, writes Peter Bergen.
August 26, 2014 -- Updated 2242 GMT (0642 HKT)
Former ambassador to Syria Robert Ford says the West should be helping moderates in the Syrian armed opposition end the al-Assad regime and form a government to focus on driving ISIS out
August 27, 2014 -- Updated 1321 GMT (2121 HKT)
Ruben Navarrette says a great country does not deport thousands of vulnerable, unaccompanied minors who fled in fear for their lives
August 27, 2014 -- Updated 1319 GMT (2119 HKT)
Robert McIntyre says Congress is the culprit for letting Burger King pay lower taxes after merging with Tim Hortons.
August 26, 2014 -- Updated 2335 GMT (0735 HKT)
Wesley Clark says the U.S. can offer support to its Islamic friends in the region most threatened by ISIS, but it can't fight their war
August 26, 2014 -- Updated 2053 GMT (0453 HKT)
America's painful struggle with racism has often brought great satisfaction to the country's rivals, critics, and foes. The killing of Michael Brown and its tumultuous aftermath has been a bonanza.
August 26, 2014 -- Updated 1919 GMT (0319 HKT)
Rick Martin says the death of Robin Williams brought back memories of his own battle facing down depression as a young man
August 26, 2014 -- Updated 1558 GMT (2358 HKT)
David Perry asks: What's the best way for police officers to handle people with psychiatric disabilities?
August 25, 2014 -- Updated 1950 GMT (0350 HKT)
Julian Zelizer says it's not crazy to think Mitt Romney would be able to end up at the top of the GOP ticket in 2016
August 25, 2014 -- Updated 2052 GMT (0452 HKT)
Roxanne Jones and her girlfriends would cheer from the sidelines for the boys playing Little League. But they really wanted to play. Now Mo'ne Davis shows the world that girls really can throw.
August 25, 2014 -- Updated 2104 GMT (0504 HKT)
Kimberly Norwood is a black mom who lives in an affluent neighborhood not far from Ferguson, but she has the same fears for her children as people in that troubled town do
August 22, 2014 -- Updated 2145 GMT (0545 HKT)
It apparently has worked for France, say Peter Bergen and Emily Schneider, but carries uncomfortable risks. When it comes to kidnappings, nations face grim options.
ADVERTISEMENT