Banker to the Poor

"I chose this book for the power of the story that he tells – the founding of Grameen Bank and the success that it has had and the implications of the whole micro-lending aspect to improve agriculture, to reduce hunger, to advance this green revolution; looking at what he was doing, the importance of making capital available to the very poorest people who need help to get started on the climb out of poverty. On the cover of my copy there’s an old wooden ladder, and the symbolism of that when you are so poor, for the $1, $2-a-day people, is so important – that ladder to get started and climb out of the poverty they are in. That book helped me understand the importance of micro-finance so that the small farmers can access the improved seed varieties, the little amounts of fertiliser they need and can share the risks of farming. Financing and lending is the lifeblood of agriculture for farmers anywhere in the world because you are planting and doing the work before the harvest comes in. You need something to get started. For so long the small farmers of Africa have had very little access to financing, so micro-lending coming to rural areas of Africa has been and is becoming increasingly important. You see it in a number of countries. Certainly in Malawi, and with Opportunity International Bank – I followed them around in Malawi and saw how important it is for small farmers. You’re going to start seeing it in most stable African countries where the government is committed to boosting agriculture – Ghana, Kenya, Ethiopia, Tanzania, and it is starting to spread. Then the next step is the new crop insurance. So, as these farmers are taking these loans, which implies some kind of risk because they’ll have to pay them back when the harvest comes in, they are taking out insurance. So, if there is a drought or something that ruins their crop they have this insurance – again, a financial instrument that has long been available to most farmers in the world. To have that kind of insurance to go along with the micro-lending then shares the risk, so you take the loan, you plant the better seeds, you use the fertiliser and then if something happens and the crop fails you have insurance to pay it back. The micro-lenders are introducing this insurance themselves because it’s also protection for them."

"No. People are very predictable. They want to make money and they want to change the world. But that door was never open to them because economics never put that aspect of people into the theory. So, I say why don’t you create that part of economics and then we can do both things? We can create business for selfish purposes, which we do today, and we can create business for selfless purposes too, meaning solving the problems that we have around us. And I call this a social business and that is the subject of my book. How do you build a social business? We have created a lot of social businesses in Bangladesh. One example is the joint venture with multi-national company Danone. We have created Garmeen-Danone in Bangladesh – Danone is a yoghurt company. So this is a social business, as apart from the other part of Danone which is money-making. This is designed to solve the problem of malnutrition among the children of Bangladesh. Half the children in Bangladesh are malnourished and good nutrition is in very, very short supply among the children here. What we did is we made this yoghurt and put all the micro-nutrients that the children lack into the yoghurt and we made it very, very cheap so that children can eat it (and they love it!) and if they eat this yoghurt for eight to nine months, two cups a week, they will regain all their health because it contains all the nutrition they need. This is the objective for which the company was created and Danone and Garmeen will never take any profit out of it because this is not a company to make money; it is a company to solve a problem in a business way. So the company makes enough money to continue business and cover costs without fresh investment. That is a social business."