Creating Social Capital
Inspired by the work of Nobel Peace Laureate and banker to the poor Professor Muhammad Yunus, CI unveils the California Institute for Social Business.
By Lori Putnam
The Yunus revolution of providing microcredit to the poor began with 42 Bangladeshi villagers chained to poverty as a result of $27 owed to a local moneylender. With lending practices that included high interest rates and the requirement that villagers sell their wares at prices determined by the lender, these struggling entrepreneurs were left with only pennies a day to eke out their survival.
Enter Professor Muhammad Yunus. Born in what was then East Bengal, the Fulbright scholar returned to his native country following the birth of modern Bangladesh. He was inspired to help build a prosperous future for the fledgling country, and in 1972 joined the Economics Department at Chittagong University. Two years later Bangladesh was plagued by a horrific famine that left Yunus questioning his ability to make a difference.
“We’re not interested in your past, we’re interested in your future”
Yunus recounts in his New York Times bestselling book, Creating a World Without Poverty: Social Business and the Future of Capitalism, the challenges of teaching economics against the backdrop of such suffering. “This was not the Bangladesh which I’d hoped to play a role in building,” he writes. “I found it increasingly difficult to teach elegant theories of economics and the supposedly perfect workings of the free market in the university classroom while needless death was ravaging Bangladesh.”
So he went searching for someone he could help, if only for one day. And that is when he was introduced to the predatory lending practices found in the villages adjacent to Chittagong University. “I couldn’t believe people suffered so much for so little,” he said. In that moment Yunus decided to pay the villagers’ debt of $27. And in that one action, he started the foundation for what would become the Grameen Bank and a new social movement providing small loans to the poor regardless of their past, or nonexistent, credit history.
At first borrowers were incredulous, but Yunus reassured them that “…we’re not interested in your past, we’re interested in your future.” Today Grameen, which means “village” in the Bangla language, lends $100 million a month to 8 billion borrowers in loans that average less than $200. Some 97 percent of the borrowers are women, and now Grameen has expanded to American cities including New York and San Francisco. In 2006, Yunus was awarded the Nobel Peace Prize in recognition of the worldwide impact he has made in empowering the poor through social enterprise and received the Presidential Medal of Freedom from President Barack Obama in 2009.
Defining Social Business
Yunus tells his audience that he dreams of the day when children will have to visit museums to see the ravages of poverty. Until then, he continues to spread his word of empowerment of the human spirit through social business. His recent trip to the U.S. included a much-anticipated visit to the CSU Channel Islands campus where he helped launch the first-ever California Institute for Social Business in the MVS School of Business and Economics and participated in the University’s sixth annual Campus Reading Celebration.
Vice President for University Advance