Nobel winner

Advice on starting social businesses

Nobel prize winning economist Professor Muhammad Yunus is in New Zealand to help solve some of the country’s toughest social challenges.

The Bangladeshi-born founder of Grameen Bank, who is often referred to as the “godfather of micro-finance”, has come here to give a series of talks with social entrepreneur Derek Handley and engage directly with policy makers, iwi, investors and educators.

Professor Yunus met Handley through social leadership initiative The B Team, co-founded by Sir Richard Branson, when he joined the movement as a founding leader in 2013.

The Dhaka-based father of two believes businesses have a social responsibility to help tackle poverty and other societal issues. “As any citizen would say: businesses do have some social responsibilities to carry out.”

He would like to see businesses created in New Zealand with the sole purpose of solving people’s problems.

“We should encourage [business leaders] to function how other businesses around the world do, and get involved in adopting our ideas and methods to address problems of homelessness and other social issues,” he said.

Yunus sees social business as the middle ground between a charity and a standard commercial entity, functioning to address problems and earn money to be retained and reinvested into the businesses.

“Selfless business” or “business without personal profit” is the driver for Yunus.

Over the past 34 years he has created more than 100 social businesses in Bangladesh, including his country’s largest telecommunications provider, tech firms and a range of businesses including those specialising in food, eyecare, textiles and water.

His efforts to combat global poverty earned him a US Presidential Medal of Freedom in 2009, a US Congressional Medal in 2010, and the 2006 Nobel Peace Prize for founding Grameen Bank, “the bank for poor people”.

We should encourage [business leaders] to function how other businesses around the world do, and get involved in adopting our ideas and methods to address problems of homelessness and other social issues.

Professor Muhammad Yunus

He likens his desire to help solve social problems to that of being bitten by a bug.

“It’s a funny thing. Once you do it, you can’t stop it. It’s a bug — if it bites you, you’re done. You can’t get out of it — it’s an amazing experience.”

Growing up in rural Bangladesh in a low to middle class family, Yunus is the third eldest of nine children and holds a PhD in Economics from Vanderbilt University in the US.

In 2006 Yunus founded healthcare company Grameen Danone Foods which creates nutritional yogurt. “We produce this special kind of yogurt with micro- nutrients and sell it in the market very cheap so poor children can buy it. If the child eats this yogurt it can then overcome the malnutrition situation and become a healthy child.

“It is a social business because owners don’t want to take money out of it,” he said.

In Bangladesh there are approximately 60 social businesses, most of which are run by Yunus. While he said social businesses solve problems, he says smart business is fixing problems and making money at the same time.

A key fundamental of a social business is that it has to be affordable.