Creating a Supportive Environment for Social Businesses |

Creating a Supportive Environment for Social Businesses

20120223_Mohd_Yunus_w170On 23 February 2012, Nobel Peace Prize Laureate and Pioneer of Social Business Professor Muhammad Yunus spoke about “Creating a Supportive Environment for Social Businesses” at a public lecture jointly organized by the Lee Kuan Yew School of Public Policy and NUS Enterprise. In his talk, Professor Yunus addressed the role of governments, businesses and citizens in fighting poverty.

Speaking about microcredit in particular, Yunus, who won the 2006 Nobel Peace Prize for championing the cause of lending to the poor “to create economic and social development from below”, identified the creation of specialized legislation as key to creating a supportive environment for such activities.

By way of example he pointed to the seminal “Grameen Bank Law” that created a separate legal regime to govern microcredit. Without this law, the microcredit institution he founded, Grameen Bank, would have become a conventional bank which typically would not lend to the poor, deeming them not credit-worthy, and not the kind of bank it is now. 

He highlighted how this struggle remains relevant today, as the absence of specific legislation has prevented microcredit from growing beyond non-government organisations. He expressed dismay that “policy makers have not responded’’ and even “stayed away”, as such legislation is necessary to institutionalize microcredit markets. Nevertheless, Yunus did express caution over the power of legislation: “laws are like moulds” and must be very carefully crafted as they can “shape society” in both positive and negative ways.

Addressing the challenges faced by social businesses other than microcredit, Yunus first questioned traditional assumptions about both poverty and business. He denounced the misconception that a lack of education and skills are the root of poverty, and asserted that “poverty is externally imposed by the system” and its “inability to capture a sense of human life”.

This, he asserted, has “created a distorted outcome…and nobody should suffer because of the outcomes created by the system”. He went on to discuss how business models are being structured around maximization of profit to the detriment of human needs and wants, saying, “human beings are not money-seeking robots”. While acknowledging that money-making is an essential part of keeping a business afloat, he wanted to see businesses and the societal system reflect that human beings are “multi-dimensional…not single dimensional” in nature. In capturing this human “spirit”, social businesses are created, he said.

Yunus, who said he has earned the moniker of “serial company maker”, inspired his audience when he said this stems from being able to identify problems and creating a company to deliver the solutions. Thus was born Grameen Check, clothing which promotes traditional hand-loom weaving skills, to a collaboration with French company Group Danone, which addresses child malnutrition in Bangladesh by producing a yogurt fortified with micro-nutrients, produced with solar and bio gas energy and served in environmentally friendly packaging.

He used these examples to illustrate the important role businesses can play in addressing social needs while remaining profitable. Calling it a “big ambition to suit a big company”, he recounted successfully challenging the German sports apparel company, Adidas, to adopt a mission of ensuring “nobody in the world would go barefoot”. Such social businesses, he emphasized, are legitimate, self-financing businesses with a social mission that reinvest rather than extract profits.

In his closing remarks, Yunus added that he was encouraged to see an increasing interest in social business, as evidenced by a growing number of such enterprises as well as dedicated educational courses and institutes. This awareness, combined with technology, will result in a generation with immense “creative power”. According to him, if young people continue to find “this concept interesting, they can solve problems, not wait for governments”.

 

By Emma Dudley, a first-year Master of Public Policy student at the LKY School.

 

Multimedia: Webcast |

 
Synopsis:
Co-organised by the NUS Enterprise and the Lee Kuan Yew School of Public Policy (LKY School), this
public lecture by Professor Muhammad Yunus will address the challenges of creating a supportive
environment for social businesses. Addressing civil society and government bodies, Professor Yunus will illustrate how social business can play a partnering role in addressing the social needs of a country, and also suggest policy frameworks that will be conducive for the growth of such businesses.
 
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Speaker(s):

Professor Muhammad Yunus, Nobel Peace Prize Laureate; Pioneer of Social Business; Chair, Yunus Centre

Date:
Thursday, 23 February 2012
Time:
5.15 p.m. - 6.30 p.m.
Venue:

Auditorium, Level 3, Block B, Faculty of Law,
NUS Bukit Timah Campus
469G Bukit Timah Road
Singapore 259776

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