Muhammad Yunus is blazing another trail in his constant search for new and often unconventional ideas for confronting poverty, head-on. Just as Grameen Bank revolutionized banking with its bottom-up approach, I believe his latest initiative—social business—has the power to transform the way societal problems such as poverty, ill-health and even environmental degradation are addressed.
We have already seen that transformative effect in the success of two social businesses, each one pioneered by Professor Yunus. Grameen-Danone has become operational and shows the potential to significantly improve the nutrition of Bangladeshi children while providing real economic opportunities to local communities. Grameen Green Children Eye Hospital will provide valuable eye care services with the goal of alleviating cataracts, which afflict hundreds of thousands of people in Bangladesh. The first hospital opened in 2007, and three more are planned.
Grameen Foundation has been involved in the successful creation of two social businesses, both of which are mentioned in Dr. Yunus’ new book. One is Grameen-Jameel Pan-Arab Microfinance Limited, a joint venture between Grameen Foundation and the Abdul Latif Jameel Group that advances microfinance in the Arab World. The second, Grameen Capital India, is a collaboration of Grameen Foundation, the Institute for Financial Management and Research (IFMR) Trust of India and Citicorp Finance (India) Limited (CFIL). These social businesses have already shown that by combining the responsive, ever-evolving nature of a capitalist business with the passion inherent in a social change-focused organization, we can create a model in which performance is measured in social impact, and its market value is influenced by the extent to which societal problems are solved.
The microfinance sector can make great gains in expanding its outreach and moving closer to social and financial sustainability through embracing the social business model of for-profit, non-dividend companies with an overarching social purpose. Agree? Disagree? What other strategies can microfinance embrace to propel themselves forward? How can other social businesses model the examples set by microfinance-based social business to enact their own changes, and how can those businesses synergize with MFIs?
Alex Counts is the President and CEO of Grameen Foundation.
