2. Micro Credit Lending and Principles of Social Entrepreneurship

yunusTo date the standard form of addressing issues of social and economic development has been government and international institution lead from a top down perspective. Muhammad Yunus, 2006 Nobel Peace Prize Winner, economist and author of Banker to the Poor, conducted a two decade experiment in his native Bangladesh that confronted the development thinking status quo and has evolved into a multi-billion dollar service.

Feeling shame from not doing more for the poor of his country, he left a position as a university professor to embark on a journey that would later become known as Social Entrepreneurship and Micro Credit Lending. His initiative started from an intuitive feeling that people are at their best when they can control their own fate. His belief was that providing capital to poor people would enable them to start businesses and thereby placing them in control of their lives. “Work does not save the poor,” he theorized, “but it is the capital linked to the poor that saves them.” (Appendix 11)

From this first theory he set up a private banking institution to lend money to the poor people of his country. His bank, as opposed to standard banking procedures of the day, did not request assets as collateral. The collateral he sought was that borrowers demonstrate self respect and the ability to assemble a group of peers to monitor repayment. With this approach the bank spread from one village to another.

Twenty years later, what was once a social experiment is now being heralded as a new form of lending money while encouraging individual responsibility. The formula of liberating the genius of creative agencies within people to enable them to make better lives for themselves is based on slow and steady business growth and the implementation of entrepreneurial ideas.

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