Just back in Dhaka after a whirlwind book signing tour of America and Europe to promote his just released book elaborating his innovative concept of social business to solve complex social problems like poverty, malnutrition and lack of access to drinking water, Nobel laureate Muhammad Yunus is pushing the envelop further to midwife the birth of two social investment funds and a social stock market in Mumbai to add more building blocks to an emerging global social business ecosystem.
The upcoming social investment funds would be different from existing social funds worldwide, according to the Grameen Bank founder, because they would be like social businesses and not for making money for investors the way todays social funds do. His version of social business is a non-loss, non-dividend company, which ploughs profits back into the business. Though investors recover their money over a period of time, they get no dividends.
He only only champions what he believes is right, but is also vocal about what he does not approve of. He has been critical of SKS Microfinance going in for an IPO. He believes the way to scale up fast for microfinance institutions is to seek a licence to raise deposits and use that money for lending.
Yunus should know what he is saying. Today Grameen Bank lends $1 billion a year, which is raised from its own deposits. He has demonstrated the successful translation of his social business concept into profitable ventures many times over.
For example, Grameen and Danone, a French company, have set up a joint venture Grameen Danone Foods to produce fortified yoghurt for malnourished children in Bangladesh. There are collateral environmental benefits, too. Yoghurt is produced using renewable sources of energy and sold in environment friendly packaging in Dhaka and Chittagong.
In another instance, Grameen-Veolia Water has been set up as a 50:50 joint venture with an investment of $800,000 by Grameen subsidiary Grameen Healthcare Services and Veolia Water, a French company, to treat water for contaminants like arsenic and supply it to poor people in Goalmari in Bangladesh. Similarly, Grameen and Intel, an American company, have set up Grameen Intel to offer online IT solutions in healthcare and agriculture and planning to expand its bouquet of services ranging from educational solutions to financial offerings to villagers.
While Grameen and BASF, a German company, have set up a joint venture BASF Grameen to produce chemically treated mosquito repellent nets to protect people from getting malaria in high risk areas, Grameen Green Children Eye Care Hospital follows the business model of Indias Aravind Eye Hospitals, which work on cross-subsidisation to charge people according to their affordability, but offering uniform services to all.
His book ‘Building Social Business – The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs’ is replete with examples of the journey of such ventures, their travails and triumphs. It also adds to the important body of work on social business comprising his previous books ‘Banker to the Poor’ and ‘A World Without Poverty’.
Refusing to rest on his past laurels, the Grameen founder is incubating more social business joint ventures with Felissimo of Japan and Shaklee, a natural nutrition company in America. Similarly, social investment funds are being set up with Islamic Development Bank, Monaco Fund, and Credit Agricole Fund. Watch out for his next book to see how these ventures take off.
Source: The Financial Express
Published on 15 June 2010