In 2006, Bangladeshi economist Muhammad Yunus won the Nobel Prize for Peace for unique microfinance model Grameen Bank. In India for the launch of his book, he talks to The Indian Express about his work, flaws in the banking system and entrepreneurship. Excerpts from an interview:
What brings you to India?
My book came out, called a World of Three Zeroes — zero poverty, zero unemployment and zero net carbon emission. I launched the Indian edition in Kolkata, Mumbai.
Tell us about your book.
The book is about the idea that I have been promoting through my work, to create a world with no poor person, no unemployment. I am raising the question that the economic system is grossly flawed because it makes very wrong assumptions of human beings. It interprets human beings as driven by self-interest only, as if the human being is a machine of selfishness. That’s a wrong interpretation, narrow. Humans are a combination of selfishness and selflessness but the capitalist theory we practise does not include the selfless part. I say as a complete person, I create business on the basis of selfishness; with selflessness I create business, not to make profits but to solve people’s problems…
Do you have a model for such a business, currently functioning along those lines?
We call it the social business, one that I have been doing all my life. Now it is a global phenomenon, being done in many countries including in India. In India there is a group of industries, corporate bodies that got together to create social business along with their conventional business. Tata companies are one such — Tata Steel, Tata Chemicals, Tata Trust. In other countries like France, Japan, Germany and Canada, too, companies created social business. Young people are doing that, many universities are creating social business centres — one of the meetings that I had was with Asoka University, they are launching one such centre. So is Banaras Hindu University. These are important for fixing the fundamental flaw.
Another flaw in the economic theory is that the only way for human beings to continue with their lives is to find a job, so everybody has to find a job. That is a wrong interpretation. Human beings are independent beings; they are born as entrepreneurs, not job-seekers. We should teach our young people you have two choices: you can work for somebody or become an entrepreneur. The basic thing in your DNA is to become an entrepreneur. If we all become entrepreneurs, there is no question of unemployment. Problem of unemployment is created by the concept of employment. That theory has mesmerised us, paralysed us. It is all a result of wrong policy. The real policy is to encourage you to become who you are and that’s where the financial system is wrong, because it is designed to make you work for someone else, so they are interested in the person that is hiring you and not you. I say, what’s wrong with me? If you had financed me, I would have had my business to begin with.
How does the state prioritise someone over their potential employer when he has the potential to generate more income?
Entire financial system has been designed in a way that the more you have, the more you get. If you have nothing, you get nothing… The financial system should be built the other way: if you have nothing you get the highest priority. The question is, is it the state’s responsibility to make someone who has money make more money, or to make someone who has no money make money? It’s a choice. I would say the state’s priority should be the one who has no money. That’s where microfinance came in.
It has been some years that you set up Grameen Bank, won a Nobel Prize for it. Are you happy with how much that idea has been taken up or disappointed at how little it has been taken up?
Both. I was happy; at that time, I did not expect that it would catch up because I was only trying to solve local problems… But once it started working, I realised it works for everybody… I was happy that the idea spread to other countries. But then I was disappointed that although it has spread, it did not spread as much as it should have. We are 40 years with Grameen Bank, the whole banking system should have changed in that time because of the example we created that finance can be brought to poor people in a sustainable way. They pay back with interest, all of it proven. Still, it is not there
That’s the question I raise: why… Banks still do not lend to the poor, they still do it the old way – if you are rich, you get more; if you have nothing, you get nothing. The one conclusion I came to is that banks have been designed the wrong way. We call them banks but they are not really banks. People say Grameen Bank is a bank for the poor and I say I am a banker for the poor… But if there is another banker, do you say he is a banker for the rich? The fact that you call him a banker, it is assumed that he banks for everyone. But he doesn’t… The bank he represents is a bank for the rich. In the meantime you lost the appetite for creating a bank for the poor. We need separate banking institutions different from conventional banks… That separate institution has not been created
What kind of profits does Grameen Bank make?
It has given profits of 10-20% over all the years and the borrowers are the owners of the bank so they get money for themselves. Another big problem that is created is wealth concentration. All the wealth of the world is being concentrated in fewer and fewer hands… It is like a mushroom getting bigger and bigger… the stem that represents 99% of the people is getting thinner and thinner. That kind of system is a ticking time bomb. You are waiting for the anger to burst out. Solution is, we have to fix the capitalist system.