The final keynote at SIBOS 2012 is Muhammad Yunus, founder of Grameen Bank and Chairman of the Yunus Centre.
I blogged a little about him earlier, but here’s the full speech:
I got into banking by accident and, at the beginning, had no idea what I was doing. I was a teacher. I got forced into it due to the loan sharks operating in my town.
I thought to myself: I can solve this problem. It’s complicated, but I can solve it.
So I tried out my idea for the people in a village next to my university campus. The money involved was so small that it didn’t matter to me to make the loans.
I loaned $27 …
… to 42 people.
I thought that would get them out of the crisis with the loan sharks but I didn’t realise the impact this would have on me and their view of me.
They looked at me like I was some sort of angel and I thought: it’s nice to become an angel for just $27, maybe if I lent $54 I could be a superangel. Then I went to the bank and asked them to do this, instead of the loan sharks. The banker guy was shocked as banks don’t lend money to poor people. But I got around it as I acted as the guarantor, and so the bank started lending to the poor, and soon created a new dedicated division of the bank to do this, called Grameen bank.
That was 35 years ago and now the idea has spread around the world with around 165 million microfinancing projects operating around the world.
Coming from $27 to that is quite a way.
In the intervening years, I have thought about what happened and one of the key differences about our approach is that we were lending to women.
99% of the borrowers of the banks in Bangladesh were men at that time, but I made sure it went to the family of women. By doing that, I also found it got so much more benefit than when we lent to men and so we ended up focusing on women. 97% of our loans go to women.
The poverty situation of the people is the key thing that drove me to do this and money was not the purpose of what we were doing, but an excuse to get them in to the system.
Money was not the purpose, but an excuse
We wanted to make sure, step by step, that the children of the families we were supporting didn’t repeat the same mistakes as their parents.
We wanted ensure children didn’t repeat this by having children go to school. Finally, we made that happen. That also takes effort, as we saw children coming through the doors of the high schools and colleges which is expensive. So we created education loans, and thousands and thousands of these kids are now professional people going to schools and universities.
It’s a completely different situation.
You see the mother and daughter.
They look alike and have the same clothes, but when you ask what she does the daughter might be a medical doctor. She’s just visiting the village where her mother looks after chickens. And you thought they both looked after chickens.
What comes into your mind as you see this is that the mother could have been a doctor too.
Whose fault is this? Is it the fault of the mother or someone else?
I started describing it in a way I feel very strongly about and it is a metaphor that people are like Bonsai trees.
You create a Bonsai tree by taking the tallest tree in the forest, finding its best seeds, and then you plant those seeds in very small pots. As a result, the tree grows small. It’s the same tree. It’s the best seed. But you take the best seed and you plant it in the smallest pot and so you get the smallest tree.
That’s what poor people are.
Poor people are Bonsai trees.
They are planted in soil that stops their growth, and poverty is created by the denial of opportunities and by creating the wrong structures. That is the cause of poverty.
It’s not an internally generated thing, it’s external.
So we’re always looking at the poor people to see how to solve their problems, and when I do I that, I look at us and ask, as it is we who create this situation.
They didn’t create it. We did.
That is why the process that creates poverty cannot end poverty.
As simple as that.
Look at the way that economists design their conceptual frameworks and you can see why.
Our framework is all about making money and the mission of all businesses is to make money.
As there’s only one kind of business worldwide it’s made us into moneychangers, as that’s the only game in town. There’s nothing else.
It becomes a habit and an addiction, and we don’t know what else to do.
So making money is fine, but that’s not all we want..
If all we do in our lifetime is make money, that’s not right.
Money making is a means to an end, but is not the end. The end needs to relate more to me. What do I want as a human being? How do I want live my life? If all I am here to do is make money, is that the point of life?
No, to me we are multidimensional and if we are multidimensional then we need to reflect our lives in our systems that way.
And it is not philanthropy.
Philanthropy is ok, but it means that money goes and you wonder if it comes back. You spend a lot of time raising money and hoping it comes back, but it does not. You are always dependent upon someone else and so I don’t do philanthropy. I solve problems, and I think the best thing about my approach is that I didn’t know what I was doing. I just wanted to solve problems.
If I knew what I was doing, I would probably find that I would not succeed in solving any of this, because I would be constrained by thinking like everyone else.
Here’s an example.
Sixteen years ago, seventy percent of Bangladesh had no electricity.
That means that at night time seventy percent of the country had to go to bed, as there is no ability to do anything in the evening.
So we created a solar powered light using a renewable battery. Initially we sold one a month, then one a week and now, sixteen years later, we sell more than 1,000 solar powered lights per day and will reach the millionth system sold in Bangladesh next month.
As you can see, this is a business that now makes money, but that’s not why I created it. I created this to solve a problem: light in the evening.
This also illustrates the differences between conventional business and social business.
In conventional business, everything I do is for me; in social business, everything I do is for others and not for me.
Sure, everyone can be selfish but we can also be selfless, so social business focuses upon that selfless part.
Now these businesses are being followed by big businesses, global businesses.
For example, we are creating forests in Haiti. Haiti lost all of its forests and we are replanting them. The business will cover its costs, but it’s not there to make money. It’s a social business but, give it time, others will follow because it is a business that solves problems.
Don’t underestimate the changes we are going through either.
We used to have a Soviet Union and a Berlin Wall, and they disappeared almost overnight
Don’t underestimate the speed of the change.
Give it twenty years and China will have an economy two and half times bigger than America’s is today. China and India will, by then, produce more output than the rest of the world put together. What will that world be like and where will you stand then?
Technology is also changing fast. When I started, we had slide rulers and logarithmic tables. Then we got computers and you were afraid to enter the computer centre because it was so vast and big. Thirty five years later, you have more power in your pocket than we had in that university computer centre.
Technology is changing in a way that is at lightning speed.
This is illustrated by one of my other companies. We created a company in Bangladesh called Grameen Phone to bring cellphones to the country. The idea is to bring phones into the villages and then banking. We offer loans for phones for villagers, and we now have half a million cellphone ladies in the villages of Bangladesh. This represents a 50% market share. In 2007 there were only half a million phones in the country. How things change fast.
Twenty years from now, everything you think might happen probably will happen.
And the same will be true in banking. Twenty years from now, you probably will not recognise banking. Something new will happen very fast and that’s what generates tension between the generations. Young people today are smarter than any people in history for example, not because they are more intelligent or insightful, but because they were born with technology.
We had to spend days in the library to find answers, they just Google it. When mum and dad say this is the answer, their ten year old will turn around and say no, that’s not ture. The answer is X. Mum and dad will say how do you know that, and their kid will answer ‘cos I just googled it.
We can change the world therefore, and we are all looking for a world so different to this one that we can change it.
The deeper this crisis becomes, the greater the opportunity to change it.
We need to change or things will get pushed away, so why don’t you imagine a world where no person is a poor person.
That can happen.
A country like Bangladesh could not dream poverty would be reduced, but poverty will have been halved by 2015 and would have been sooner if we had not had this crisis.
We have reduced poverty by half and I think we can reduce poverty to zero by 2030 in Bangladesh.
In 2030, not a single person will be poor.
On that day, we will put an advert in the paper to say if you can find a poor person in Brangladesh, a million dollar reward.
Then we will build museums to poverty, and our kids will ask what is poverty, dad, as no-one will be poor.
Whose fault is poverty?
And if you can design the system correctly, you will never have poverty. Or unemployment. Have you ever heard of an animal that is unemployed? No. That only exists in human society.
I hear of generations being on benefits. Fourth and fifth generations of people on benefits. That reflects a system that is designed the wrong way.
If we can build systems that allow ships to go to Mars, we should be able to build a system that ensures every person is fruitful and not poor.
When Professor Yunus finshed he got a rousing five minute standing ovation from the SIBOS crowd.
I've only ever seen that once before when Nicholas Negroponte presented the one laptop per child mission at SIBOS 2007.
Anways, that’s it from me for today. I’m off to the big shindig tonight and will write a wrap tomorrow of all the funny bits of SIBOS and the best stand giveaways. Enjoy.