Before an intimate Christchurch audience, a Nobel Peace Prize winner shared his vision for a socially conscious world.
Professor Muhammad Yunus, the Bangladeshi social entrepreneur and “banker of the poor”, spoke at the Charles Luney Auditorium on Sunday, brought to the country by SingularityU and a raft of local organisations.
Aside from sharing his wisdom, crafted over four decades of providing micro loans and other social services to poverty-stricken villagers in his home country, Yunus was in the country to launch a Yunus Social Business Centre at Lincoln University.
“[Lincoln] have requested us to allow them to set up the centre, focused on curriculums and courses on social businesses so students can learn and faculties can do research,” Yunus said.
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About 35 universities around the world hosted a Yunus Social Business Centre and the Lincoln chapter would be New Zealand’s first.
Lincoln University professor Christopher Gan said he hoped the centre would attract post-graduate students, while Yunus’ “extensive network” could help fund research into social business.
A social business removed the objective of profit from the business model, instead focused on solving social problems, Yunus said.
“Often we even say maximisation of profit is the goal of business, so people push it. Instead, we created a different kind of business.”
The 76-year-old started his career as an economics professor, including stints teaching in the United States, before questioning the “elegant theories of economics” and returning home in 1976 to provide micro-loans to mainly female villagers.
Scepticism of traditional economics led to Yunus creating the Grameen Bank in 1983, spawning other social businesses in the fields such as healthcare, insurance, and solar power.
His efforts were rewarded when he and his bank were jointly awarded the Nobel Peace Prize in 2006 for creating “economic and social development from below”.
Yunus said while charities have helped many people, their model was unsustainable due to a reliance on donations.
“It is at the mercy of the people who will give the money, so we wanted to make sure these businesses could lean back on their own strength,” he said.
The auditorium sat transfixed as he explained how Grameen Bank now had 9 million borrowers across Bangladesh, and issued $1.5 billion in loans last year to people in 8000 villages.
“Nobody is rejected when they come in to ask for a loan, all we ask is, ‘What do you want to do with the money’.
“If their proposal is weak, instead of sending them away, we work together to make it stronger.”
When asked what the biggest problem the world currently faced was, Yunus said the “ticking time bomb” of wealth concentration would lead to “social upheaval and political outbursts”.
“That is not a sustainable thing,” he said.
“The solution is to undue the system that we built that pushes all the wealth to the top. You have to create a reverse process and create new financial institutions because they are the engine which does the job.
“This system is not working, this system is heading for a disaster, so before we hit the disaster, we have to get up and turn back.”