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
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
That was 35 years ago and now the idea has spread around the
world with around 165 million microfinancing projects operating around the
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
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
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
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
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
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
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
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,
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
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
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.