A history of microfinance | Muhammad Yunus | TEDxVienna

all I can say that whatever I did probably if I can look back I can service trying to do very little thing and I was not trying to persuade anybody to do anything just what I thought I can do I try to do that and it is started with a little amount of money so little that you can laugh at it looking back is a total loan of twenty seven dollars to forty two people so it's not even a dollar apiece so that's what excited me and wanted to do more of it it's trying to persuade the banks to do it they wouldn't do it so I offered myself as a guarantor I said okay I'll sign all your papers and take all the risk and you give the money they are stuck with their rules and procedures so I was trying to kind of get over those things and that was the beginning luckily it worked and continued to grow lending money to women tiny little money everybody said is going to collapse very soon he said until it collapses I'll keep on doing it so why should I stop it just because some date is going to collapse which we don't know whether cool that's it and then we created a bank out of it called it Grameen Bank or village bank and people asked me how did you figured this out all these rules and procedures that you put into it so that it can work even in the adverse circumstances as timid words I said Wow I don't do very hard work I can easy going man I just look at the conventional banks how they do it and once I learned how they do it each piece and I just do that and it works they go to the rich people so I decided to go to the poor people they go to man so I decided to go to women they go to the city center to business I wanted to go to the village remote village they want collateral forget about volatile who once collect all if you want collateral you never get to the poor people so dismiss collateral they have big lawyers in their bank we said we don't need lawyers so we have the only lawyer free bank in the whole world traveling it works we don't need them in lawyers and the banks conventional banks want to know you're all in dissidents what you have been doing whether you know everything what kind of business you have been running everything your past as much details as they can get so we should forget about it we are not interested in the past of our borrowers we're interested in the future of our borrowers so if you are looking for the poor people I'm sure there is something they have done which you know may not be very pleasant why dig into it so because he or she is not responsible for society is responsible for what he or she has been doing so why don't you just give it a break and start fresh see what he or she wants and this is how we wanted to do conventional banks concentrated on owning or conventional banks are owned by the bridge people so we reverse the - we made this bank owned by the poor people and not only conventional banks are owned by rich people mostly it's all owned by rich men so we reverse that we not only make it owned by the poor people we made it owned by poor women so this is a bank which is owned by the borrower's themselves right now we have eight point three million borrowers 97% of them are women and they on the back a day run the bank they are the board they decide the rules in procedures and so on so forth so this is one way to describe how the operationally and structurally the whole bank is done and then you can understand where we come from it's not just tiny size of loan makes it coming back is kind of making everything other way in one meeting in the early years 10 P or 11th year of bankers the one banker was saying Rosario knows you're not going to get it get away with this you made the whole banking system upside down ICT aside that's what exactly I did because banking system was standing on its head so I'm trying to put this on his head and they challenged me on an account they said you should change the name of your bank make the name Grameen women's bank several bankers suggested that I should change the name of the bank because explanation was at that time we are only 64% women the rest of his men the early years so when I was replying to this question I said yes I am very happy to change the name of the rang I'll make the Mac Grameen woman's Mac but but before I do that you would like you'd have to do something change the name of your bank because 99% of your borrowers are men so you should say X man's Bank Y man's Bank Z men's bank after you have done this then I will come and do mine I mean women's Mac so it's very easy when you do it with women everybody says it's wrong you should if you do it with men that's perfect there's no problem with that so this is continuously we have been facing and another issue comes up in our work because I've been insisting that all human beings are enterpreneurs it burns up many people who why does he say that there are only few people who are entrepreneurs rest of us we are not entrepreneurs we have to work under the interpreters I said no all human beings are interpreters that's how we survived on this planet otherwise would be in the caves still leaving the kind of life we live there because we all work together to change your life that's how we came here and still function here they didn't take it very seriously then they said yes you can lend money to the poor people but you should be looking for entrepreneurial power I said not in my case because everybody's entrepreneur so I go ahead with that even she tells me again and again no sorry please don't give me money I don't know what to do with my your money I never used money in my life I can't use your money we don't give up with him on chasing we keep in explaining to her no you can do that so that confidence builds up in her just because she doesn't have confidence doesn't mean this is he's done her she doesn't have intrapreneur liability is a question of building confidence in her so we try to build the confidence because society has totally demolished her confidence in herself that's what the poor people are you say you are wrong you're no good you're good for nothing and generation after generation that they have heard it they have that's what they believe in so we wanted to change that build confidence in them in order to demonstrate that even the poorest person can be entrepreneurial I don't they do something so that I can demonstrate this this idea was to lend in to beggars you cannot be poorer than beggars there's a last stage of human survival you have no other source you go and beg for your daily food go to houses neighbors find something to eat or get some money to eat and that's all you serve you not only do it once or twice that becomes your livelihood for rest of your life I said let's try that so we started talking to the beggars we started talking that as you go from house to house begging would you like to carry some merchandise video some cookies some candies some toys for the kids and we make it sound easy for them by saying you are going there anyway this is not extra work for you so and you are giving people more options so that if they don't want to give anything free you may try to sell something so they may like to buy something or they may like to do both give you some food free and also buy something from you so you have two businesses going instead of one business people like that beggars like that they said where do we get the money I said we will give you the money so we started giving them the loan our idea was if they succeeded in getting the loan and thing is back by the business they would do that we'll show that yes even a beggar can be an entrepreneur on his own on her own we thought there will be 1,000 or 2,000 beggars in the program it became such a popular program we ended up with more than hundred thousand beggars in that program and we have been watching them what is their what are they doing is became very popular what they do as we explained and now in the last five years this is about the time that we are doing it in last five years out of this hundred thousand barriers more than 22 thousand beggars have stopped begging completely because they became successful door-to-door sales person and not only they became door-to-door sales person some of them became your personal shoppers you come in the house wife says when you come tomorrow you bring me this she brings you this because she cannot go to the market all the time but this lady is going around doing things where she brings you whatever you needed little things but you have a good business going people ask us to buy them and she she feels comfortable and know how family feels comfort over my colleagues who are getting so enthusiastic about this program because they see that even a beggar can change your life by selling something doing something they keep saying why don't the other backers get out of begging why are they taking so much time I try to I try to advise them to be patient I said please be patient it takes time after all begging is their core business you don't shut down your core business just like that okay you have to totally confident how the new business your sales division is working so clap so once they figure out what the sales division is doing well then they may say well build this division core for business we cannot shift so it takes a lot of courage to come to that stage that you close down completely so this is gradually they will come when you talk to them they tell you something very interesting they say they know which house is good for buying or selling which house is good for begging so they go accordingly so by by this time they have experience between who are the one who are doing both so I tell my colleagues not only they do the business we have not trained them anything they already know how to do the market segmentation which one hey and their loan size is such a small amount they start with something like $12 $15 that's about the size and paying back that loan they are enthusiastic to take the second loan and the third loan each one becomes bigger and bigger and bigger so you look at this phenomenon and you ask yourself what creates poverty what created this situation that human being has to be brought into this kind of situation where they have to beg for existence it's just a fault of the person repeatedly I come to the same conclusion there is nothing wrong with the people poverty is not created by the poor people poverty is created by the system that we have built the concepts that we have created that's what created poverty nothing absolutely nothing wrong in human beings it is poverty is externally imposed phenomenon it is not internally developed phenomenon so if it is externally develop imposed phenomenon we can if we remove that external imposition people will come up human being as anybody else and that's how the question of that Banzai came I started describing poor people as bonsai people there's nothing wrong with their seat they're their seat as good as anybody else's said simply society did never gave them the space to grow so they are just like the tree on a flowerpot so thinking what's going wrong with the concept I thought I started looking at what is happening in the world I said in the meantime in order to solve problems I started creating businesses it almost became instinctive in me whenever I see a problem I go right ahead and design a business start a business to solve that problem I didn't notice it before but when you have done it once when we've done it twice and you have done it hundred times then you realize it do you have an instinctive feature that you design your business to solve a problem you look back you created so many problem so many such companies we have problem of electricity so we created a solar energy company everybody's the rose color business is not going to work in Bangladesh I said who knows it may work let me give it a try nothing wrong if I fail is okay but I have to try so I tried to bring solar home system it is expensive for the plural people we made it easy for them to pay back it was extremely difficult even to sell five solar home system or month it was such a struggle now we came to a stage after 15 years we sell more than thousand solar home system per day and it's growing improving any sit down in a business way so we did the solar energy in a business way and it's expanding people love it because they need electricity because kerosene lemma is no word for them so this is what we do then I realized maybe this is a category of business which is missing in the in the whole conceptual framework because conceptual framework gives you one type of business business to make money I said that's wrong interpret of human beings human beings are not just money-making machines human beings are not robots human beings are much bigger than just one dimensional being yet multi-dimensional being what happened to other dimensions so that's done the question of selfish aspect of human being selfless aspect of human being came into discussion I said why don't we create business on the basis of the selflessness where I don't want to make money for myself by decision nobody has imposed it because I'm so excited to create business to solve a problem it is such a next X such an exciting experience to may be able to solve the problem then I said that maybe is the one which you should be doing it's a non loss non dividend company to solve the social problem so we started creating more and more of these companies then we had one connection with the known of France we talked to Frank repo he was trying to understand what coming back is I started asking him what Danone is then he said he explained to me what tunnel is suddenly I didn't think about it before because I go with a plan for him he just stopped on the way to talk to him I said what why don't she have a company in Bangladesh we can do it jointly whatever he thought he just stood up shook hands with me he said yes let's do that I said but I have not finished yet I said it will be a social business he said what is a social business then I gave my spill this is the social business you will never get any money out of it you can take your money back to what he invested but something more than that he stood up again shook hands he said Ivan I agree then I thought he didn't understand my Bangladeshi English and Rob I didn't understand his French English so on the way out I sent him a very detailed email and he immediately sent back I understood everything you said I stand by what I committed let's go ahead and do it and this is 2005 dead company was created in 2007 and continued to function now we produce yoghurt fortified with micronutrients for the children who are malnourished in Bangladesh and that yogurt does wonderful thing to the children because half the children of Bangladesh and malnourished so this produced a yoghurt which has all these micronutrients and once this children eat this they regain their health because if you're malnourished your physical growth becomes very stunted similarly your mental growth becomes a stunted so it's a very strange situation for a nation to have a half the children malnourished so we thought at least in our way we can see if we can do that now it works since it works as a social business so we can go and replicate add as many factories as possible we have just the first Factory which is fully in full production so we are starting the second Factory and we calculate we'll have 50 such camp factories around the country so that every child has access to this yo can see delicious yogurt children love it so that's an example of social business so we created many such social business with international collaborations not because we wanted it but international multinational companies wanted it so we have collaboration with Veolia to produce water our water has a serious problem arsenic and pollution so we are creating we have created a small company to bring clean water in the village in a very affordable way we created a company to produce shoes with auditors we challenge them that they should take a position that nobody in the world should go without shoes and is a shoe company it is their responsibility to produce shoes affordable to the poorest people they ask me how much the price should be to make it affordable I said maybe under one Europe they were shocked that a leaders shoes had been sold under one euro so I said well it's a if you want to do it desktop price range you can go they took the challenge after long debate and discussion within the company they did that now after two years of research and test marketing next month we'll have the full mass marketing will begin actually next month so this is another example of social business because they're wearing Adidas shoes or Reebok shoes doesn't mean you are going for fashion this is an essential thing if you go barefoot particularly in country in tropical countries like Bangladesh you contact lots of diseases particularly parasitic diseases and many many people are affected particularly women and children are affected by this because they are always in an area where it is very easy to contact parasitic diseases so you protect them from the parasitic diseases we have created Grameen BSF to bring mosquito nets so that you are not attacked by the malaria and all these companies are done for the sake of protecting yourself from diseases or escape from malnutrition and so on so forth companies don't want to make money out of it they want to make sure the impact of these companies are on the people you measure the impact so in a money making companies at the end of the year you ask your CEO how much money we made this year the more money you make more excited you get in a social business you accept you ask your CEO how much impact we have made this year you're not asking how much money we made because you're not making money for yourself if money is made it stays with the company but the whole company is dedicated to create them back and that's how measurement of impact becomes very important thing so that way if you open it up this idea can create a new kind of phenomenon if you I believe that every human being has debt selflessness but our theory our concept doesn't allow that to come out so I'm creating a window I am creating a door so that it come out if it comes out then all the problems we have created over years and years of our way of single-minded pursuit of money may be addressed by creating all this social business we address that technology is our at our command we have enormous technology but this technology is at the control of the businesses what do they use of it make use of it make money I said if we can now create a door or create a road to use this technology to solve problems all this problem will be resolved human creativity and human capacity is limitless in the presence of this limitless human capacity and human creativity all the problems of the world cannot just stand for few seconds it could have to disappear and this is the age where we all have this capacity of Technology all the question is do we have the methodology of using this capacity to adjust these problems if you do we can do it through social business you may have better idea of doing it but whole question is creativity of human being has to be channel to address the problems that we have made for ourselves if we do that we can create a whole new world we will create a whole new civilization and that's what we should be looking for thank you very much you

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Keywords: micro credit, Nobel Peace Prize, ted talks, tedx talks, english, social change, Educational, Microfinance, ted, YY, tedx talk, Banker to the Poor, ted talk, Grameen Bank, microcredit, tedx, austria, ted x, TedxVienna, Muhammad Yunus, Social Business, Grameen Foundation

Id: 6UCuWxWiMaQ

Length: 23min 47sec (1427 seconds)

Published: Wed Jan 18 2012