Dr. Muhammad Yunus Talks About Selfless Business; the Creation of the Grameen Bank

Below is the full transcript of Dr. Muhammad Yunus' acceptance speech after receiving a Liftetime Achievement Award at Give2Asia 2015 Ignite+Inspire Gala held on September 30, 2015 at the InterContinental Mark Hopkins Hotel in San Francisco, California. 

Event photographer: Kathryn Rummel

Event photographer: Kathryn Rummel

I will try to just start from Bill Fuller and move on to what has happened in my life since Bill Fuller.

What we all remember from the microcredit story – in Bangladesh there was a food shortage, but the real problem was famine; people were dying of hunger all the time. Not in hundreds, not in the thousands, but in the hundreds of thousands. And in the street, dead bodies. So that was the environment in which I was teaching elegant theories of economics in the classroom.  And imagine how anybody would feel – teaching the classroom, all those theories – which says everything will be perfect, all the problems will be solved, if you follow these rules. And nothing was solved. It was getting acute and impossible. So that’s when I was feeling kind of like a totally useless person.

I thought, 'Let’s forget for a while, all those theories. Why don’t I just go outside of the campus and be in the village? I'll see if I can do something for one single person. Can I make myself useful to one single person, even for a day?'

So I was looking for my niche so that I could feel I was useful to someone. And that was the beginning. And I learned a lot in the village meeting people.

But the most shocking thing that hit me – hit me in the face, it was so ugly – you cannot believe one human being can be so cruel to another human being in the same village. They live for generations in the same villages, but still can be so cruel to each other.

Suddenly it came to my mind, 'Yes, I can do something! Why don’t I lend the money myself? If I lend the money, the person who receives the money doesn’t have to go to the loanshark. He’s free. He’s protected from all the exploitation.' Immediately I went to do that and I’ve not consulted anyone; I didn’t get anybody’s advice. I just went and took money from my pocket and started giving money in the village, so that they don’t have to go to loansharks.

I had no idea what it would lead to, but sensation was the word that was created in the village. Everybody rushed to me to borrow money.

You think I got scared? No, I was very happy. I thought for the first time I’m doing something that touched a lot of people. So I merrily gave away my money, lending money. As my money went on, people kept coming more and more. In a couple of months I saw that my money would be running out very soon.

What do I do? Should I stop it? I’ll continue. There was no reason I couldn’t continue; I wanted to continue. So, I thought, 'I must continue, I must find a way.' I went to the bank branch located in the campus to tell them, 'Why don’t you lend the money, instead of me?'

The bank manager fell from the sky. He couldn’t believe that one would even propose such a thing. He said, 'The bank doesn’t lend money to poor people.' I said, 'Why not?' His answer was, 'They are not bankers.' I said, 'What does it mean? They are not going to pay back?' I said, 'They are going to pay back.' So it went on and on. They took one position; I took another position.

Months went by trying to persuade banks to lend money to the poor so that I could continue this program; I wouldn’t have to stop. Since they were not agreeing, I finally offered them a deal. I said, 'Why don’t you accept me as guarantor? I’ll sign all your papers, and you give the money. If they don’t pay back the money, I’ll stand as guarantor, and I’ll pay it back to you.' They couldn’t believe such an offer could be done. But, finally, they told me to just do it – I was becoming a nuisance for them.

So I agreed. They contributed, thinking in a couple of months it would have been a disaster so they would be free from all these obligations. But it didn’t end in two months. It continued and continued, and it got bigger and bigger. Then they became reluctant. That’s when I thought, 'Why don’t I create a separate bank? These banks will not continue such a thing.' I wanted to create a bank.

That’s when Bill Fuller comes into the picture.

So the story goes all the way back to the 1970s. It started in 1976. Bill Fuller came in 1976 or 1977 as The Ford Foundation country director. So he came up with an idea: you offer yourself as a guarantor, to make money available to poor people. The Ford Foundation – with Bill Fuller’s idea – will provide the guarantee fund for the banks so that they don’t stop, and that was what gave a big life to the Grameen Bank, immediately.

That was the beginning phase. And it grew and grew. And we never touched that money because that money was never utilized at all because it’s a guarantee fund like a bank account. The idea is so perfect. You never have to resort to using the guarantee money at all.

To let the story continue – since then, it expanded all over Bangladesh. Today, we work all over Bangladesh. More than 80 times the business has grown in Bangladesh. Now we have 8.5 million borrowers. Women, 97% of them.

The Ford Foundation – with Bill Fuller’s idea – will provide the guarantee fund ... and that was what gave a big life to the Grameen Bank, immediately.

We give tiny loans because they can only handle tiny money -- so small, 30 dollars, 35 dollars. When a woman holds this money, she shakes. She cannot believe anybody will give so much money in her hands. So that’s the amount that she can dare to hold. And if you ask to take more money she will be scared to death to handle it.

So we introduced the principle that everybody needed to have a savings account. Tiny savings. Whatever they can afford, even if it’s pennies. But they must save.  So we made it a pattern. They will open a bank savings account and put a tiny amount of money into the bank account. And it grew over time. A large number of people put in a tiny bit of money, and it becomes large money. But we didn’t realize how large it could get. Last year, for the first time, we realized how large the bank had become.

Last year, their total savings exceeded one and a half billion dollars.

So I tell the banks, “You have to change your language now. You keep referring to them as borrowers. 'Our borrowers are doing this, our borrowers are doing this.' I said, 'They are no longer borrowers, they are lenders. They are giving money to you. They give more money to you than you give them. So the borrower is you.' The tables completely changed. We never thought at that time that this would spread in the United States.

We were challenged to do it in the United States because they said it would never work. I said, 'I don’t think so. It can work anywhere in the world.' They said, 'We have tried to with 500 different organizations, it didn’t work.' I said, 'You can do it with 5,000 organizations – even if they don’t think it will work – I still say it will work.' They said, 'How come? How come it doesn’t work with us?' I said, 'Because you don’t know how to do it.'

They were really upset.

This one person said, 'Why don’t you then come and do it, and show it to us?' I said, 'I would love to do it. But you have to give the money. I can’t bring money from Bangladesh to them in the U.S.'

They are no longer borrowers, they are lenders. They are giving money to you. They give more money to you than you give them. So the borrower is you.

One guy in the audience stood up. He said, 'I will give the money. Let’s do it.' Because of his standing up, we started talking about it – how much money and such – and finally, we started it in Jackson Heights, in Queens, New York. This was the first branch of Grameen America. And it was beautifully done. It’s so successful, every New Yorker wants to have it in their own borough. Now, there are 8 branches in New York City, 2 branches in the Bay Area, and 2 branches in Los Angeles; and there are other branches in Charlotte, North Carolina; Houston; Omaha, Nebraska; Boston; and so on. In all, 18 branches. There are over 60 thousand borrowers in the U.S., 100% women.

The initial loan to start is something like 1,200 dollars. And it’s amazing to see how hard people work with those 1,200 dollars, to make sure every penny is worth investing. And today, it’s expanding. Many more branches want to be opened. People want them to be opened. They take it as it goes, as the funds are available. They can take it.

The repayment rate is absolutely near 100 percent, 99.6 percent. Never fell below repayment rate of 95 percent in all the banks in the United States. No guarantee, no collateral, no papers; people pay their money back. So that’s the Grameen story.

I’ll continue my own story.

When we were doing all those microcredit things in Bangladesh, we saw many other problems in the families: health problems, education problems, sanitation problems, energy problems. So, every time I see a problem, my instinctive reaction is to create business to solve that problem. So I created another business after business. I have more than 50 businesses in Bangladesh in that spirit, in that design. It has a unique feature. At that time I didn’t realize it, but people look at it and ask questions and I have to explain.

And I see these features in explaining them:

None of them are created to make money for anyone. These are businesses; these are not charity organizations. These are sustainable organizations. You sell things for acts or services and get the money back, and you cover your costs. But nobody is taking personal profit. Then more discussions came – I explained to them – but people had to put a name to it. I started calling these Social Businesses: non-dividend companies to solve human problems. Many young people want to start these. Many big businesses are interested in it.

One of these examples out of many is ... 

Bangladesh doesn’t have much electricity. So that wherever you go all you see is a kerosene lamps when the sun goes down. I thought, 'That’s a shame in this day in age that they still have to use kerosene lamps for their living.'

I thought, 'Why don’t we bring solar energy?' This is about 20 years back. Everybody laughed. At that time solar energy was not that much in Bangladesh. 'It will never work in Bangladesh,' they said. I said, 'Well I’ll try, I don’t know if it will work or not.' So I created a company and called it Grameen Shakti or Grameen Energy. And started selling solar home systems in the village.

Nobody believed that this would actually create electricity. They said, 'This is crazy, don’t even go near it.' Selling 3 or 4 solar home systems a month was such a big struggle. But, finally we made it. 3, 4, 5, 10 solar home systems; we didn’t give up. 50 solar home systems per month, we kept continuing.  18 years later, we reached the point we sold more than 1000 solar home systems per day.

I started calling these Social Businesses: non-dividend companies to solve human problems.

Today we have 1.6 million homes with solar energy in Bangladesh through this company. Many other companies are created now. They thought, 'This is a good idea why don’t we do it? NGOs are doing that.' So together, probably over 3 million homes are on solar energy right now. We could make money, lots of money; because now that it’s a roaring business, everybody wants it. But that was not the intention. We feel that as a social business. And people have good health because the fumes created by kerosene are a health hazard. For village homes, these are also fire hazards. So this is now replaced by solar home systems. So this is one example of how an idea can be brought to solve a problem in a business way.

Why did I do it in a business way? Equally, people do it in a charity way. If you want to create solar home systems, give solar home systems for free to people living in the village. If I did it free, I would do it 10, 20, or 100 solar homes. I cannot do more because I need money to give them money, to write the check so that I can do it.  So I thought, 'If I do it in a business way, it becomes unlimited possibilities because money keeps rolling, keeps coming back.' And ever since then I’m explaining that charity is a wonderful idea, it solves lots of people’s problems, but it has a limitation.

In charity, money goes out, does wonderful work, but it doesn’t come back. You have only one-time use of the money. But if you can do it in a business way – social business way – that social business money goes out, does the work, and then comes back.  Then you have unlimited use of the money. You can go on rolling that money again and again. I said, 'This is really powerful.' So this is what is happening now. And then I said, 'Today lots of problems have been created in the world because we mistake human beings and economic theory.' We’ve designed an idea of human beings and economic theory – as a person who’s self-centered, who is selfish, all he wanted to do is for himself or herself. I said, 'Human beings, no matter what they are differently, they are not one-timers. Economic theory made us believe that they are one-timers.' I said, 'Human beings are not money-making robots. There is selfishness in human beings; this is part of human beings. At the same time there is selflessness in human beings. But economic theory does not recognize selflessness. They only commemorate selfishness.' I said, 'That’s where we went wrong, that’s where we created so many other problems. We don’t have time to look at anything else, except for my own interest.'

There is selfishness in human beings; this is part of human beings. At the same time there is selflessness in human beings. But economic theory does not recognize selflessness. They only commemorate selfishness. ... That’s where we went wrong, that’s where we created so many other problems.

So I created a business based on selflessness. That’s what the Social Business is all about.  In conventional business, profiting business, everything is for me, nothing for others. In Social Business, or selfless business, everything is for others and nothing is for me. It’s backed by choice; it’s not by force. So this is what we do. And suddenly we see possibilities and interest all across all the problems in the world, in a creative way, in a business way, in a sustainable way. And that’s why it’s so exciting.

Then many big companies became interested in our work. They want to join social businesses. At first we were suspicious. Is this really true? They want to join with us? Or, they want to make money through it? Then we saw they were genuinely interested in doing Social Business.

The first company we had a joint venture with is Danone from France. What we have done with the joint venture: we produce yogurt, a very special kind of yogurt, to address the problem of malnutrition among the children of Bangladesh. Bangladesh has a very high malnutrition rate among children, like many countries in the world. It’s such a shame that children cannot have normal physical growth, normal mental growth, because of malnutrition. So we created this special yogurt, and put in all the micronutrients that are missing in the children, into the yogurt, and made it of very powerful nutritional value. And we made it very cheap so poor children can afford it. And made it very delicious so that children love it. Today, it is very popular. Our first factory was at full capacity and could not cope with market demands so we had to expand it. Almost double the size of the existing, previous factory to cope with it. It’s a Social Business. Danone doesn’t take any money out of it as a profit. In Social Business the investor can take the money back over time, from whatever he or she has invested. But the rest of the money stays with the company to be recycled, to be brought back into the company to achieve the goal. So this is one true example.

Then we have joint ventures with Veolia, which is a water company. Water is a big problem globally. We created a social business to bring clean water into the villages. We have joint ventures with Intel Corporation, to bring healthcare to the poor people. For pregnant women, we have the bracelet. They wear them, which gives you several things: one of them – it gives you a warning bell when the air quality at home gets above a certain level of fumes. Then it gives you a voice message; you come out of the house or leave the room because this room is not good for pregnant mothers. It also gives monthly messages that this is the fifth month of your pregnancy, and these are the symptoms you will feel during this month. These are normal, and nothing to be worried about. But, if you have symptoms like this, then you press this button, and we’ll get in touch with you. So this is, again, a Social Business so that pregnant women can communicate and also understand their pregnancy: what they can expect, what goes wrong, and what can be done, etc. So we see these up close, Social Businesses and so on.

And suddenly we see possibilities and interest all across all the problems in the world, in a creative way, in a business way, in a sustainable way. And that’s why it’s so exciting.

Coming back to Grameen Bank. We make sure that children of Grameen families go to school because their parents never went to school. We want to make sure that children don’t repeat the same history as their parents. In their parents’ history, their ancestors’ history, nobody went to school. So we thought we’d create a new generation. Grameen families will be literate, educated.

We encouraged them right from the beginning and we made it successful. We said, 'Don’t worry about money, Grameen Bank will give you education.' So now, hundreds of thousands of young people are becoming doctors, engineers, professionals, and so on, because what I did was different from any other children in Bangladesh. So they do very well with this.

The problem for us, after they finish colleges and so on, for many of them there is no job in the country. 'Where do we go? Why did you send us to school? Why make us take this long to go to universities?' So, I didn’t know how to answer that. At one point I made up my mind, I said, 'I’m responding to that. When a problem comes I respond to it.' I kept asking, 'Who told you to have a job? Did your teacher ask you to have a job? Or did the book you read tell you to have a job?' Even they couldn’t answer this time. I said, 'Forget about the job. These are old fashioned ideas. A job is something obsolete. It used to be in the previous century. It doesn’t happen in the new century. A job is obsolete.'

'What else are we supposed to do?' I said, 'You make up your mind in a different way. Tell yourself repeatedly that I am not a job seeker, I am a job creator. And act like a job creator, think like a job creator.' Well, it is easy to say this for me.

We created the Social Business Fund and told all the young people from Grameen families, 'Just come up with a business idea. That’s all you need to do. You don’t need to have money. You come up with a business idea and you can explain how the business works. We’ll become your partner. We put the money from the Social Business Fund and you make it successful, and as you become successful, return the money that we gave you. You don’t have to give me your profit because the profit belongs to you; we don’t take it. As a Social Business we are not interested in your profit. We just want our money back, that’s all.”

I said, ‘Forget about the job. These are old fashioned ideas. A job is something obsolete.

So now hundreds of these young people keep coming every day with thoughts of business ideas and so on. And I genuinely feel the job is not natural for human beings. A job is to work for somebody else. Human beings are basically entrepreneurs. That lesson I learned from Grameen Bank. All these women, the 8.5 million that I was talking about – they are not job seekers. They don’t go to apply for any jobs anywhere. They want to use a 20 dollar-, 50 dollar loan and make a business out of it. And continue to grow the business, and continue to expand their deposit amount – their small amount of money that they saved – out of the business that they have started.

If someone out of these young people said, 'I don’t know how to start a business. They never taught us how to start a business.' I said, 'Look, did your mother go to university to learn how to start a business? Was she looking for a consultant to find out how to start a business? She dared to take that 30 dollars, and took that tremendous risk for her life, that she was going to commit this money into business and pay back the money to the bank with interest, and have money for herself.  And she made it successful.' 

And that is the story for every single Grameen Bank model.

What is the use of your education if you are not better prepared to be an entrepreneur? If you don’t have a business idea, why don’t you go and learn from her? From your mother? She has maintained this business for 20 years, for 30 years. Why don’t you take it up and make it 10 times, 100 times bigger than that, with your education and so on? That’s where we went wrong because we are telling young people to find a job, but in our history human beings are entrepreneurs. We are go-getters. That’s what human beings are all about. But we have distorted their mind. We are telling them they are in the education system, and at the end of the education system you have to find a job. You have to start with a job education. You’re not saying you finish your education, or during your education you come up with a business idea and make a business for yourself.

Today, unemployment is not only in Bangladesh, it is a global problem. Even in the rich countries, Spain – 48 percent of the young people are unemployed for many, many years now. It’s increasing for Italy, for Portugal, for Greece. What kind of system are we in? It’s all because we are considering them as job seekers. We are not saying that you are an entrepreneur, go ahead and do the things. I am told again and again there are 60 million young people joining the job market every year globally. I said, 'That’s not a right statement to make.' Instead, every year 60 million young entrepreneurs are joining this world to bring this world back into place. That’s all.

I am told again and again there are 60 million young people joining the job market every year globally. I said, ‘That’s not a right statement to make.’ Instead, every year 60 million young entrepreneurs are joining this world to bring this world back into place. That’s all.

The rest is a financial system. If you provide the financials, anybody will be an entrepreneur. So what I do to sum up everything I do, I put three zeros in front of them: zero unemployment, zero net emissions, and last one, zero poverty level. And I think people have gotten around to accepting that because the Millennium Development Goals aimed to reduce poverty by half by 2015, and Bangladesh has achieved it by 2013. So there are many countries that are achieving that: reducing poverty by half. So the question is how do we do that by 2030? And that’s when SDG comes around – ‘Sustainable Development Goals’ were just announced and adopted by the United Nations. It wants zero poverty by 2030.

That’s my zero poverty. And I always keep saying that by the time we finish this task of zero poverty we’ll be creating poverty museums. Because there is no poverty in the world. People in the next generation will be wondering, 'What is this poverty?' So we’ll have to take them to the poverty museum. Like the dinosaurs that don’t exist anymore – we take them to the dinosaur museum.

The second zero is zero unemployment. Everyone will be asking among each other, the young people will be asking, 'Did you know that one hundred years back there used to be unemployment in this world?”' And their kids will say, 'What is unemployment?' 'Oh – they didn’t have any job.' 'How come they didn’t have any job? What is a job? If we didn’t have a job, then why are they waiting for a job? Why don’t they do something themselves? Did somebody put a spell on that person?'

Nobody will understand what is unemployment. How can an able-bodied human being full of entrepreneurial ability, full of creative capacity,  sit there day after day and in a lifetime do nothing? Nobody will understand that.

And these women of Grameen Bank, women of the United States who take this little loan and start a business – they are the heroes. They’ve changed their mindset. You don’t have to look for a job, you can create your own and create jobs for other people. You become an entrepreneur. So that’s zero number two: zero unemployment.

Zero number three is zero net carbon emissions. We must work toward the goal of making zero net emissions. So once we put these three zeros together, we are at the door of creation of a new civilization. Selfishness-based civilization is not sustainable. It cannot take us very far. It is a selfless kind of system – we have to come to the new civilization where we discover ourselves as full entrepreneurs.

Thank you very much.