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  Business Times 3 Nov 07
S'pore good place for social enterprise: Nobel winner

Straits Times 3 Nov 07
S'pore has room for social business, says Nobel laureate

Today Online 3 Nov 07
Micro-credit a defiance against stupidity: Yunus
Conventional wisdom not sacred: Nobel Laureate
Sheralyn Tay

IT took just US$27 ($39) to start a worldwide movement that gives hope to the poor. And for Nobel Laureate Muhammad Yunus (picture), what must have highlighted the success of the Grameen Bank was meeting two "Grameen Children" here in Singapore one of the 18,000 who have benefited from the micro-credit bank's student loans.

Speaking at a forum hosted by the Lee Kuan Yew School of Public Policy and the Institute of Asian Studies on Friday, Professor Yunus said the micro-lending system he started was an example of "defiance" the key to breaking free from poverty.

"The system that creates the problem cannot solve the problem," he said, meaning that one has to look beyond existing financial, political and social structures that are flawed.

"The financial system is wrong because it rejects poor people. It absolutely makes no sense for the financial system to give money to those who already have money, rather than those who don't have it."

Hence, Prof Yunus started his micro-credit system lending small amounts of money to the poor.

He began by giving US$27 to be shared among 42 Bangladeshi families to help them start small businesses during the famine of 1974. He has gone on to lend money not just to the poor but also women a group historically neglected by banks in India.

Today, 97 per cent of Grameen Bank's 7.5-million borrowers are women. According to Prof Yunus, money lent to them has had a better social impact than that lent to men.

For one, the village women tend to abide strongly by one of the 16 "decisions" issued by the bank sending their children to school. Almost 100 per cent of Grameen children are sent to school, said Prof Yunus, and many go on to university to do medicine and engineering. Indeed, he said he had met two of the children, who are studying here.

And by literally bypassing the grid, Prof Yunus has brought electricity to rural village households. In 1996, he set up Grameen Shakti, a not-for-profit energy firm that brings solar power systems to remote and rural areas of Bangladesh.

"It's worked out pretty well," said Prof Yunus. Just two months ago, it installed its 100,000th system. Villagers pay by monthly instalments.

Ultimately, said Prof Yunus: "Don't take conventional wisdom as a kind of sacred cow. Sometimes, conventional wisdom can also be conventional stupidity. We started where we started from because of going against conventional stupidity. If it doesn't work, attack it."

Straits Times 3 Nov 07
S'pore has room for social business, says Nobel laureate

Not-for-profit schemes can make society here 'more balanced and humane'

By Cheong Suk-Wai

SINGAPORE is a global business centre with room for 'social business', according to Nobel laureate Muhammad Yunus.

That is what the Bangladeshi economist and a pioneer of micro-credit calls not-for-profit businesses and programmes set up to generate jobs and other opportunities to help those trapped in poverty.

'Social business' is not charity, but more in keeping with the adage: It's better to teach a man how to fish than to give him fish.

Speaking to The Straits Times here yesterday, Professor Yunus said: 'The business proposition is for the poor to pay a tiny amount of money for you to take care of their needs.

'You can, for example, provide health insurance to the poor, who pay a little bit every year for it. And I know if Singaporeans design it, it will be of world-standard quality because you have the highest standards.'

Two or three Singaporeans, he added, could start such businesses just by pooling, say, their year-end bonuses.

In fact, he pointed out, with Singapore's reputation for quality, other countries would soon want to replicate its schemes since they would probably be the 'most efficient' by far.

Doing so, he added wryly, would also make society here 'more balanced and humane'.

Prof Yunus, who won the Nobel Peace Prize last year for lending tiny sums to the destitute so they could go into business, was on a whistlestop here yesterday as the keynote speaker at a panel discussion on development in Bangladesh and Singapore, at the National University of Singapore's Bukit Timah campus. It was organised by the Lee Kuan Yew School of Public Policy, NUS and the Institute of South Asian Studies.

In 1974, the unassuming man started a social revolution when he took US$27 out of his pocket and lent it to 42 Bangladeshi basket-weavers.

After years of dispensing small loans to the desperate, in 1983, he set up the not-for-profit Grameen (Bengali for 'rural') Bank in Bangladesh to help even more needy folk, whom he made part-owners of Grameen and who paid it back in weekly instalments.

Today, Grameen is owned by 7.5million Bangladeshis, most of them women, who previously held no purse strings because their culture entrusts money to men.

With 98per cent of all borrowers repaying loans totalling more than US$5 billion (S$7.2 billion) today, his successful ways with micro-credit are now followed in, among other countries, China, Canada, Thailand and India. His goal is now to get Bangladesh's total population of 150million owning the bank by 2013.

Grameen has also branched into more not-for-profit ventures such as Grameen Shakti (to light up most Bangladeshi homes with solar power for people to read at night) and GrameenPhone (giving villagers solar-powered pay phones so they can run businesses). The bank also gives out 30,000 scholarships a year to poor students, now known as 'Grameen Children'.

Which begged the question: How to get materialistic non-Grameen children to help the needy?

Prof Yunus smiled and said: 'Children today are born with plenty. And what do you do with your life when you are born with plenty? You want to do something to put your signature on this planet.'

He added: 'By having your own business with purpose, you can design things on your own and feel happy about it. This is not something that your dad or mum have done.'

Business Times 3 Nov 07
S'pore good place for social enterprise: Nobel winner

(SINGAPORE) Nobel Peace Prize laureate Muhammad Yunus believes Singapore is 'a good place' to start more businesses with a social objective.

'Creative ideas are thriving here, but for personal reasons... now widen it for the common good of the people,' said the founder of Grameen Bank, famous for its successful business of making small loans to poor people in Bangladesh to reduce poverty.

He was speaking at the Lee Kuan Yew School of Public Policy yesterday, ahead of a panel discussion among top personalities from the private and public sectors in Bangladesh and Singapore on the development of the two countries since independence.

In his wide-ranging speech and a discussion with the 200-strong audience afterwards, he repeatedly stressed the need for 'defiance' of established ideas, particularly in the conventional banking system and modern economic theory.

'Sometimes conventional wisdom is also conventional stupidity,' he said.

'We've made a big mistake in interpreting human beings in a very limited way within the financial sphere.' To see people as nothing more than 'profit-maximisers, all yearning after personal gains ... is a travesty of the truth.

'Human beings are much bigger. They are not created to spend their lives making money.'

Asked by an audience member what Singapore could do, he said: 'Run water companies, healthcare programmes, nutrition programmes for the children, address diseases that are curable but no one pays much attention to.'

Venture capital funds that channel money into such social enterprises are another possibility, he added.

'There's plenty of money here to start social businesses for Singapore and for other countries.

'Singapore can be a much broader society than currently ... its image is that this is a society which is always running for economic success - personal success, mostly.'

His experiment with Grameen Bank, which started with him making a US$27 loan from his own pocket to 42 women in a village in Bangladesh in 1976, showed that extending micro-credit or small loans to poor people can be a sustainable business model.

Today, the bank lends more than US$500 million a year. It has 7.3 million borrowers. Almost all are women - a deliberate strategy started after Prof Yunus found in the early days of Grameen Bank that lending to women had a much bigger social impact than lending to men.

Within Bangladesh, he estimates that about 80 per cent of poor families now have access to micro-credit.

'This is a methodology which should become part of the mainstream banking system, not a footnote, because two-thirds of the world's population have no access to the conventional banking system,' he said.

'People used to ask me, how much money do you need to start a micro-credit programme? If you're earning money, take one month's income - that's good enough.

'With your income you can probably give loans to 10 or 20 people. And if you can recycle this, you're in practice.

'You don't have to work with thousands. You can work with five. If you can do it with five and you're successful, you can find another 10 who would like to put in their one month's salary or income to add another five, and that's it.'

The difference between charitable giving and a social business - which he defines as 'a non-loss, non-dividend company with a social objective' - is that a social business is self-sustaining.

'Charity money has only one life,' he said. 'You can use it only one time.'

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