Grameen - the mother of Social Business!!

"We will create a poverty museum by 2030. We will start with Bangladesh"

 - Prof. Yunus

It all started with USD 27. This was the original amount of money Muhammad Yunus lent to 42 poor villagers in Jobra, Bangladesh so they could repay their debt to local money lenders and start little businesses. The small experiment had a large effect. The money was paid back. New loans soon followed. Life in Jobra changed.

Inspired by the experience of how much can be achieved with such a small amount of money, Prof. Yunus founded the Grameen Bank for the purpose of lending money (micro-credits) to people who otherwise do not have access to capital. Grameen is the Bengali word for "village" and therefore describes the very character of the social business philosophy - starting small. The Grameen Bank grew and became a great success and enabled an enormous number of people to get out of poverty.

The Grameen Bank also happened to be a social business.The microfinance business model soon spread from Bangladesh around the world. Through the Grameen Trust, Grameen has supported other organizations who have wanted to replicate their model.

At the same time, in Bangladesh, Grameen has constantly been devising new entrepreneurial solutions to the problems of the poor. They not only need access to capital, but many other things to work their way out of poverty: Health and education, clean water, good food and access to electricity - to name just a few. Various kinds of social businesses are dedicated to address these issues. Any profits generated by these companies remain with them for expansion and improvement.

Through this innovative model, Grameen has managed to improve the living conditions of millions of people.

The 7 principles of Social Business

1.      Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.

2.      Financial and economic sustainability.

3.      Investors get back their investment amount only. No dividend is given beyond investment money.

4.      When investment amount is paid back, company profit stays with the company for expansion and improvement.

5.      Environmentally conscious.

6.      Workforce gets market wage with better working conditions.

7.      Do it with joy.

And here comes the best part : the original draft of the above 7 principles in Prof. Yunus own writing.

Original document developed by Muhammad Yunus at the World Economic Forum in Davos, January 2009