#SASI #HECcampus #yunussocialbusiness #HEC
I was lucky enough to meet Muhammad Yunus, Nobel Peace Prize, Co-president of the HEC Paris Social Business /Enterprise and Poverty Chair as he was invited on HEC campus.
- Having a “Flexible” Objective
Microcredit models have been implemented worldwide, with various adaptations according to the context. Each claim to have different results: US-based Microcredit Summit Campaign states that Microcredit has helped raise 10 million people in Bangladesh out of poverty1 while in India, in 2010, the pressure created by the default on micro loans generated what was referred to as the micro-finance suicide epidemic2. I was intrigued to know if Prof. Yunus thought there was something underlying that should be present in every Microcredit model in order to ensure its success.
According to Prof. Yunus, the key for success is to have a clear objective: “if you are an objective driven initiative, objective has to be there, so that you don’t change… so you define your objective very clearly.” In his literature, the purpose of microcredits, as well as social business, is clearly stated: to create a world without poverty. Yunus had raised his concern about microcredits being used as profit maximizing business. He stated in the New York Times in 2011: “I never imagined that one day microcredit would give rise to its own breed of loan sharks” and that “Commercialization has been a terrible wrong turn for microfinance, and it indicates a worrying “mission drift” in the motivation of those lending to the poor.”3
Even so, in our conversation, I was surprised by his assertion: “Your objective is to make money for yourself, then go ahead and make money, I don’t like it but if that’s why you like it, you go ahead…”. From what I had read, the objective of microcredits should have no deviation, but now it felt that all driven objective models, whatever these may be, were OK, whether he agrees or not with these objectives: the key for success of the model is the clarity of its purpose. Has anything changed in the past few years that has made Prof. Yunus “lighten up” in his definition of objective for microcredits?
1 “Microcredit in Bangladesh ‘helped 10 million’” BBC News. 27 January 2011. http://www.bbc.com/news/business-12292108 Cited November 28, 2016
2 Biswas, Soutik. “India’s microfinance suicide epidemic.” BBC News. 16 December 2010. http://www.bbc.com/news/world-south-asia-11997571 Cited November 28, 2016
3 Yunus, Muhammad. “Sacrifing Microcredit for Megaprofits”. The New York Times. 14 January 2011. http://www.nytimes.com/2011/01/15/opinion/15yunus.html?_r=0 Cited November 28, 2016