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Professor Muhammad Yunus (pictured), founder of Grameen Bank, calls for a social business fund, social stock market and more inclusive banking at a lecture for the British Council
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The founding father of microcredit has called for a social business fund and social stock market to ensure social enterprise is at the heart of a recovering economy.
Professor Muhammad Yunus, founder of the Grameen Bank which lends money to those too poor to get traditional bank loans, said a new economy needed a way of using ‘creativity to address the problems around us'.
‘In a two-business world, making money through a money-making business will be the means and using this money to change the world will be the end. Today, we do not have that option,' he said.
‘Once we can do that, we will no longer have any problems.'
The Nobel Laureate also called for banks to create a more inclusive financial system that benefitted everyone not just the ‘privileged', as part of his lecture to mark the British Council's 75th anniversary in London on Friday, chaired by Lord Neil Kinnock.
He recalled the barriers he faced setting up Grameen Bangladesh in 1976, where the poorest were not deemed credit-worthy and ended up in the hands of loan sharks. Grameen now lends $100m a month in Bangladesh and has a 98 per cent repayment success rate.
And he said he faced the same barrier when setting up Grameen America in Queens, New York in January 2008, which has already lent more than $1m to over 400 borrowers.
‘2009 is a good year to ask the same question again: who is credit-worthy? Is it the large banks with large clients? They are collapsing, going bankrupt, whereas the poor people taking tiny loans, without collateral, are paying every penny of it and changing their lives,' he said.
‘Definitely, one lesson we have learned is that it cannot remain the exclusive club of privileged people. Banking should be an inclusive system, not an exclusive system. Almost two-thirds of the world's population do not qualify to receive the services of conventional banks.'
However, Yunus said banking was not the only area where change was needed and called for a new welfare system in the developed world.
He said that welfare systems should match any money made by those on welfare to encourage them to escape dependency rather than ‘close down all the doors and windows so they cannot try to leave' by penalising them for making money.
A film and full transcription of Yunus' speech is available here.
