Muhammad Yunus: Microcredit has big role

Muhammad Yunus

RIYADH: Nobel Peace Prize winner Professor Muhammad Yunus advised youths not to run after jobs after graduation but to prepare themselves for a career in social businesses.
Yunus is known throughout the world as a pioneer of the microcredit concept that uses small loans made at affordable interest rates to transform the lives of impoverished people, mostly women. The founder of the Grameen Bank in Bangladesh, Yunus and Grameen were jointly awarded the Nobel Peace Prize in 2006.
The Nobel laureate was speaking on “Unpacking global citizenship: Decision making challenges” at the Four Seasons Hotel on Tuesday at the MiSK Global Forum.
“To develop a successful business, we need only young people and technology,” he said, adding that everyone can be an entrepreneur.
The Micro-finance pioneer Yunus further stressed that youth and technology can solve the problems of poverty.
“You decide what’s the destination in your life, then you work for it,” he said.
“Problems are common – there’s unemployment, poverty, old age, single mothers, welfare, healthcare. There’s a common thread,” Yunus said.
Those common problems can all be combatted through the creation and maintenance of social businesses. Social businesses are cause-driven businesses that are created to solve social issues such as poverty. The social business model, as conceived by Yunus, is designed for the investor/owner to gradually recoup the money invested but not reap a profit.
During his speech, Yunus shared with the audience how he started the Grameen Bank in a village and helped women to start social businesses in 1976.
“At the time there was no collateral and no document for the loans given but there was trust between the two parties,” he said, pointing out that now there are some nine million beneficiaries with a rolling capital of $1.5 billion in his country.
His first was through creating microcredit by loaning poor people small amounts of money.
It began in a tiny village near the university where he was teaching.
During a famine, Yunus walked the village trying to make himself useful to the people and got his idea to loan small amounts of money so the people wouldn’t have to borrow from loan sharks.
He said that there are 18 such banks in the United States, including eight in the city of New York. There are some 85,000 borrowers and the repayment rate is 99.5 percent, he added.
He insisted that poverty is not the fault of the people, it is the fault of the system.
Yunus’ efforts to combine business with selflessness earned him the Nobel Peace Prize, the Presidential Medal of Freedom, the Eisenhower Medal for Leadership and Service and other awards.