Sunday, March 20, 2011

It takes one person

In 1976 Muhammad Yunus was travelling to the poorest households in Jobra, Bangladesh. There he discovered that loan sharks were taking advantage of small local entrepreneurs who were being charged unrealistically high interest rates on small sums of money; meanwhile these high rates were pounding and trapping the aspiring entrepreneurs into poverty. He discovered that by making small loans to local entrepreneurs he could drastically change their lives. And in 1976 in one of those poor districts, Muhammad chose to make his first loan of $27 to a group of 42 women.

This loan led to the next loan until finally he had started an entire movement called micro-financing. He founded the Grameen Bank in 1983 which has now lent over 6.3 billion dollars to over 7.5 million entrepreneurs. Today, there are several prodigious non-profit organizations championing the concept of micro-financing around the world.

Not only did Muhammad create a movement for micro-financing but he and a few key others revived a entrepreneurial movement called “social business”. Social Business is measured by the impact of the business on people or environment, rather than the amount of profit made in a given period. Success and sustainability of the company indicates that it is running as a business while the objective of the company is to achieve social goals.

For a very long time there have been many individual entrepreneurs running “social business” models, but they have usually been on their own, working within their community.  Because of a few key players such as Muhammad these social entrepreneurs can now start to connect, and have since been given more notice from investors looking to make a difference.

Hat’s off to Muhammad for making a difference and providing evidence for the cliche “It only takes one”