Humanity.org holds a list of outstanding commencement speeches dating back to 1936. The list was created so that people could reference them and find ways to place them “within the context of progress for all humankind”. Indeed, the list includes a number of speeches given by influential figures including Barack Obama, Bill Gates, and Steve Jobs. Yet there is one person who made significant progress for humankind through an ambitious goal of eradicating poverty that is not on the list, but on Tuesday had the opportunity to deliver a speech at Elon University’s Convocation for Honors, Muhammad Yunus.
Muhammad Yunus is a Nobel Peace Prize Winner and founder of the microfinance institution Grameen Bank. Grameen Bank has been extending small loans to poor people in Bangladesh since 1983 while achieving a recovery rate of 96.54% (as of February 2012). Through the bank, he has demonstrated the creditworthiness of the poor and helped them achieve financial self-sufficiency. Microfinance was the pioneer of social business, a kind of non-dividend company that seeks to generate a modest profit to expand the company in efforts to achieve a social mission.
His lecture entitled Building Social and Humanitarian Businesses emphasized the power of social business. He underscored two ideas for social business: 1) poverty is created by a flawed system that needs to change and 2) social businesses are a means to solve problems.
“Who creates poverty? Poverty is not created by the poor people. Poverty is created by the system we have created. The system that we teach in our classrooms,” said Yunus.
“So if we want to get rid of poverty, we have to change the system. The same system which creates poverty cannot cure it.”
Yunus explained that traditional banks did not lend money to the poor because they thought the poor were not creditworthy. Grameen Bank has shown that it is viable to lend money to the poor, but the system did not allow it.
He believes that there are two types of businesses in the world and that people should be able to choose what they want to pursue – one or the other, or both. He describes a money making business as a means, and a social business that uses those means to solve problems as an end.
“Our world would be a world of two businesses: business to make money and business to solve problems.”
“I’m not saying everybody has to do it, but people should have options.”
Increasingly, traditional companies are creating social businesses on the side. Adidas approached Yunus to explore the notion of creating a social business. Through his guidance, Adidas is working towards a goal of ensuring everybody in the world has shoes by creating affordable, quality products. The challenge is to make shoes that sell for under €1 and ensuring it is a non-loss project. This means the cost to make these shoes should be under €1 and that costs are covered.
“They worked two years to make it happen, and finally made it happen.”
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