Muhammad Yunus, together with his Grameen Microcredit Bank, won the Nobel Peace Prize in 2006 for his pioneering work in the field of microcredits. I picked up his latest book, ‘Building Social Business: The New Kind of Capitalism That Serves Humanity's Most Pressing Needs’, in order to learn more about the work of this world-famous ‘banker for the poor’, particularly in his home country, Bangladesh.  I was a little apprehensive as I know very little about business and economics.  I need not have feared.

Co-written with Karl Weber, the book offers a clear, stimulating description of his theory of how social business can go a long way in eradicating poverty. It is filled with examples of how Yunus' idea is making a difference to people’s lives and their dignity, but at the same time he does not shirk from illustrating the problems that can arise whilst creating a social business.

From defining social business as ‘a non-loss, non-dividend company designed to address a social objective’ in which ‘the profits are used to expand the company’s reach and improve the product/service’ Yunus moves on to outline the two main ‘branches’ of social business. 

The first provides goods or services, and is owned by people who are not poor, and there are no profits for the owners.  He offers examples of how large companies have become involved in social business. 

In 2006, Grameen Danone was born. The idea was to reduce poverty by providing an affordable, fortified yoghurt-type drink in rural Bangladesh, while creating business and employment opportunities for local people. The raw materials needed for production are sourced locally. Profits are reinvested  to create new opportunities for the welfare and development of people.

Last year Adidas committed to providing shoes at cost price - €1 per pair, to poor Bangladeshis.  As well as providing employment for local people, the shoes would help prevent diseases.

The second type of social business is owned by the poor and generates income directly.  For example, the Grameen Bank provides loans to low-income people, particularly women, who would be refused loans by banks, offering them the opportunity to start small businesses and improve their living standards.  When the bank opened, even beggars came to take out small loans, in an effort to turn around their lives by starting small business activities.  The repayment rates were extremely high.

The book, written in an optimistic, up-beat style, offers many more inspirational examples from the fields of health, communication, and education, of how Yunus’ work is providing a better life for millions of people in a very simple way.

Yunus’ message is believable: poverty is not created by people but by circumstances: people are born with the potential to look after themselves and to contribute to society.  Yunus’ vision that a poverty-free world can be created within a few years may sound idealistic, but his theories stand up.  Maybe one day in the not so distant future poverty will exist only in museums, as Yunus hopes.

If you would like to know more about Yunus’ work, this book gives an excellent overview.  See also http://www.grameencreativelab.com/live-examples/grameen-bank-the-mother-of-grameen-social-business.html and http://en.wikipedia.org/wiki/Muhammad_Yunus