Social business fund proposed for Haiti

Nobel Laureate Muhammad Yunus, the founder of the Grameen Bank, thinks capitalism with a conscience might be the answer to some of Haiti’s ills.

BY JIM WYSS

jwyss@MiamiHerald.com

The father of microlending, Nobel Laureate Muhammad Yunus, is hoping to midwife another idea — this one aimed at pulling Haiti out of the rubble.

Yunus was in Miami on Monday to promote the concept of building a “social business fund” that will invest in companies that are using the tools of the boardroom to tackle social problems in Haiti.

Speaking at Miami Dade College, Yunus said the idea is already showing success in his native Bangladesh.

One of his flagship social businesses is Grameen Danone Foods, a joint venture between Yunus’ Grameen Bank and food conglomerate Danone. In that case, the multinational company agreed to make a special yogurt for Bangladesh that includes micronutrients lacking in the local diet. Two cups of the yogurt per week for one year can reverse the malnutrition that plagues about half of all children, Yunus said.

Sold at sustainable but cut-rate prices, former beggars are being recruited as the sales force.

While Danone can recover its investment, the social business model requires all profits be plowed back into the business to keep fighting the root problem: malnutrition.

Such thinking could also be used in Haiti to tackle transportation problems, housing and health concerns, and the energy deficit, Yunus said. Monday’s trip to Miami was part of his effort to raise awareness and generate interest in the idea, he said.

Some $5.8 billion dollars have been pledged to Haiti since the Jan. 12 earthquake. But many on the ground say there are few signs of rebuilding.

Yunus said financing social businesses might provide the tangible, sustainable results the development community is seeking.

He’s proposing that 10 percent of all charitable donations be put into the social business fund.

“In charity, a dollar only has one life. You use it and it’s done,” he said. “As a social business, a dollar has an endless life, because it is recycled.” Even before the earthquake, the U.S. government was searching for ways to encourage investment in Haiti and Yunus’ model is intriguing, said U.S. Under Secretary for International Trade Francisco S├ínchez.

“This concept is more of a sustainable and enlightened philanthropy. We need to find more creative ways to make use of our philanthropic dollars,” he said. “Let’s spur entrepreneurship to create jobs and solve social problems.”

Yunus became a rock star in international development circles when, in the 1970s, he used $28 from his own pocket to start a small-scale lending program for impoverished women in Bangladesh.

Conventional wisdom held that the poor — with no collateral — were a credit risk. Yunus proved that the social networks created by community lending kept defaults low.

The idea caught on. His Grameen Bank, which still works with some of that nation’s most downtrodden, has helped 8.3 million borrowers since 1976.

Microlending programs have sprouted up around the world, including the United States. In Haiti, the group Fonkoze, has been offering microloans since 1994 and has more than 45,000 loans outstanding. In 2006, Yunus work was recognized with the Nobel Peace Prize.

Yunus, who has yet to visit Haiti, said he sees many similarities between his own nation and the shattered island. He’s also sure that the success he’s seen back home can be replicated there.

“Not that Haiti will change right away,” he warned. “But a process will begin.”

Read more: http://www.miamiherald.com/2010/08/31/1799747/social-business-fund-proposed.html#ixzz0yO77y3MU

Share:

Author: `