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March 2007
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Special Report

The Social Stock Market
By M. Hanif Lakdawala

Nobel Laureate, Muhammad Yunus believes that premier institutes should churn out social MBA’s who will work towards putting poverty into the Museums of Mumbai.


In his recent visit to Mumbai, Nobel Peace prize winner, Muham-mad Yunus spread his dream of ‘social business’ among the students of Mumbai University with an undying vision to put poverty in the museum.


The Nobel Laureate gave a public address on the ‘Role of Micro-credit in achieving MDGs’ (Millenium Development Goals) at the Marathi Vangmaya Bhavan of Mumbai University, Kanila campus. Narrating the huge success of micro-credit programme initiated by his brainchild, Grameen Bank, Muhammad Yunus said any village can find solution of their problems from its own resources.


“They don’t need any resource or advice from outside,” he said. “Problems can be solved locally”, he added. Terming poverty as an artificial imposition on the poor, the Grameen Bank founder said each of us has unlimited potential. “Seeds of poverty are lying in the concepts. When we can pull them out, the world will be free from poverty”, he said.


Muhammad Yunus, said that his micro-credit programme for women was a protest against conventional banking system, which does not give loans to the poor women. Criticising those who consider poor people not creditworthy, he said: “I want to tell them: Are you people worthy?” Advocating his social business and social stock market concepts amidst applause by hundreds of faculty members and students in the hall, the Micro-credit guru said, citizens can change rules and laws if they want.


He advised the students of Mumbai University, whom he termed as the future of the nation, to prepare themselves for social business to put poverty in the Museums of Mumbai for the future generation to see what poverty was.


The 66-year-old economist firmly believes that premier institutes should churn out social MBA’s. According to him, people get excited in doing good. And that should be their business to do well. Yunus has in his mind, a ‘social stock market’ where companies that are engaged in businesses in the social sector would be listed.


He suggested that the social stock market should list a new variety of business, that is social business to do good to people on a no loss, no dividend basis. According to him, human beings not only enjoyed making money, but also by being good to others. “But while doing social business, we do not want to lose money and we want to reach out to people. People needed help in the areas of health, education, safe drinking water and cheap medicine” he said.


Yunus said citizens, instead of dumping responsibility on the state, could fulfill it their own way by changing the rules. “Profit maximisation need not be the only aim. Just as in the conventional stock market where people looked to the best business houses to invest in, the social stock market would also have a listing of businesses in which people could put their money” he said.


According to him, poverty was not created by the poor, but by the system and the framework and theories taught in classrooms. “For a world without poverty, we have to go back to those very concepts and free them. For instance, banks refused to extend their services to two-thirds of the world population, creating a financial apartheid. They made it appear it was the people’s fault that they were not credit-worthy. But the question was whether the banks were people-worthy. In social business, one was the owner and one could keep it alive oneself, while in philanthropy, one was consta-ntly looking out for money to give to others” he said.


In the Grameen Bank in Bangladesh , which he founded, seven million women were owners and it evolved its own mechanism to dispense credit to the poor. The bank had 99 per cent recovery and 58 per cent of the borrowers were rid of poverty. “Our goal is to make sure all our borrowers are out of poverty by 2015,” he said.


Muhammad Yunus, believes that business in the rural sector is an opportunity in waiting. “Financial services and health care are the two most emerging avenues in the rural segment.” Speaking to this correspondent from Islamic Voice, he reasons that both these sectors offer maximum opportunity for both empowerment and number crunching business.


“A corporate house can do both business and social service together. It just needs a model,” he adds. “The model that he spells out is a ‘no-loss no dividend business”. He makes clear that this model should not be misunderstood as philanthropy.


Yunus cites the example of the $3-million joint venture between the French food major Danone and Grameen Bank, which will make available yoghurt, fortified with vitamins and other essential micro nutrients to children in the villages of Bangladesh. Coining it as a pure business venture, he reinstates that making it low priced does not make it charity, whereas such models are the key to penetrate the hinterland.


For Yunus, poverty is an artificial creation that needs to be banished to the museums. He simplifies his version of empowerment, which revolves around the idea that people do not want charity; they need opportunities to get out of the vicious circle of poverty.


And it is up to big corporate houses to facilitate those opportunities, while making their presence felt at the bottom of the pyramid. Thus one cannot only achieve social objective and still be in market place and remain competitive. Though he wants to replicate this business model with other companies, he maintains that business cannot always be for maximising profits.