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Positive Roles for Private Enterprises
Hadiza Wada,
DBA
…July, 23, 2011
We have
presented quiet a number of development issues confronting the youths and
children in previous articles. For
the youths primarily it includes serious unemployment, deteriorating educational
quality, and lack of credible role models.
Among children issues raised are, lack of proper care, lack of education,
over-exploitation through child labor, trafficking etc. In those cases we have stressed the
failure of governments to enact good policies, provide funding for programs
established, and to execute the laws and programs in an effective manner. We brushed briefly on recent efforts
within the past two decades or so by non-profit and volunteer organizations in
trying to alleviate the problem.
But because
the non-profit organizations should not be the only non-governmental efforts out
there, we present today other avenues that are being tried by others. These are strategies that work with
all the nation’s youth and children, in an effort to open ways through which
they could take care of themselves as they grow into adulthood, as well as
engaging them fully within the economy. While we would prefer original solutions
that are native to the Nigerian environment, that also takes into account local
cultural values, we believe we should also learn from several ideas out there. Grameen Bank idea is one
example, an idea that has become so popular across countries of the world.
In 2006, its
founder Muhammad Yunus won the Nobel Peace Prize for changing millions of lives
through such simple yet effective method of lifting the weak members of the
society up to participate in the economy of their nations. The following year, Yunus published a
book that attempts to explain his idea, how he generated it, developed it, and
established banks based on that philosophy.
The book titled “Creating a World without Poverty: Social Business and
the Future of Capitalism” explains the idea behind the whole program which has
been effectively applied in whole and sometimes in part in various and diverse
communities across the world.
The central
idea that Muhammad Yunus, the leader of Grameen Bank worked with, according to
him, was to reverse and work against the idea that the goal of business is
profit maximization. In fact that
goal has been challenged by many writers and scholars of business administration
alike. More especially when business
crosses with the social and cultural arena. But
it took someone with a vision on the one hand, and a determination to rid his
community of exploitation, to take it a step further by creating a system around
his idea and working on executing it.
The Idea of
Grameen Bank established in 1976 by the Bangladeshi gentleman Muhammad Yunus
came from observing the conventional bank that typically aims at profit
maximization and the idea of making the rich richer while the poor get the least
benefit from banks. The gentleman
asked himself, how he can actually reverse that thinking to a righteous one,
i.e. excess money lying in the bank should work for those who need it. He realized that banks were turning
away the real hard workers, because they have no collateral for loans and have
the least ability to pay back their loans.
He therefore “turn [that idea] on its head.”
Muhammad Yunus
said “All I did was; do the opposite of what conventional banks do.” After
succeeding with a workable process, he came up with a bank that helps the poor. He explained that idea in a book
titled “Creating a World without Poverty” which should be a good reference for
anyone who wants to participate in any program that aims at helping the poor
help themselves, as well as helping the beggars get off the street. That was what his program did to
thousands in Bangladesh and across the world where the program was emulated.
The examples
of what his program dealt away with at the Grameen bank are (a). No collaterals
(b) No guarantee is required to ensure returning the money as banks do (c) and
no lawyers or legal documents to draft.
Also, (d) conventional banks have rich shareholders who own them, but
Grameen bank is owned by poor people.
You also do not have to convince the bank that you are an expert in the
business you want to start or help grow.
Grameen Bank
actually trains its employees to go out and look for the people who do not want
to borrow money in spite of their poor [poverty like] state, especially women
who would probably tell you “I have never handled money, my husband does all
that so if you want give it to somebody, give it to him” etc. They go to such poor women with
genuine intention to help their suffering families, but have lost hope in their
ability in doing that successfully, time and again, until they convince them
that they need to take the money to help themselves, and after some time return
just what they borrowed with no interest at all, after they have made enough
profit to continue on their own with their own funds.
This idea I
believe should be also emulated by our NGOs and those non-profit organizations
genuinely out to assist the poor among the women, old and children in Nigerian
communities. They could use all
avenues including lucrative incentives to bring on board private companies and
foundations in order to join hand in assisting the community in general so
prosperity takes over from poverty, and everyone wins. Though a competitor in some sense,
Grameen Bank works tediously and continuously in raising the excess capital from
willing volunteers among the well-to-do to fund their project.
One other
thing that the bank program does is to encourage the poor to send their children
to school also. They take the time to explain and demonstrate the good there is
in learning not just to read and write but to understand, analyze and predict
trends across the nation and even abroad in order to competitively survive. It extended to the bank introducing
scholarship for such kids also. In
the process it was discovered that some of the kids were excelling in schools
even above other regular kids. So
the bank decided that no kid on scholarship will ever be dropped because there
is no longer money to support them.
That means working harder to make sure the income for the program does not go
below the amount needed to support every kid already on scholarship.
Experience has
demonstrated that, humans do not get satisfaction only when they accumulate
wealth after wealth. They also get
satisfaction from helping each other and making someone’s life easier and
happier.
Mr. Yunus
explained in a program to promote his book hosted by a U S Television Channel,
Link TV that a few years back, beggars
became the primary beneficiaries of his bank’s loans. The idea was if the beggars could
make a life away from the street that would also be an achievement. The first step was going to the
street to hear the stories behind why people go onto the street to beg. That the program believed was
essential to understand what one is dealing with.
Finding out why people are begging, it was thought, will aid in finding
ways to end it.
Initially, the
beggars would mostly resist, because they have built a way of life and routine
around regular begging. So, they
thought of various ways of persuading them to do something productive for
themselves. One could for example
say “you are going to people’s houses to beg anyway, so why don’t you try taking
along a few things.” Gradually some of them caught on to the idea and started
their own business, selling door to door.
Out of about
19 thousand that were on the street begging, after the effort to stop begging
started, says Mr. Yunus, about ten thousand got off the street altogether. The rest, making up roughly ninety
thousand are now mostly part time beggars only.
While the volunteers do not seem to be encouraged at the percentage of
success, it is generally believed that if such moral support in talking to them,
providing motivation and some insignificant monetary support to start something
of their own continue, even the part time beggars may get off the street. Turning a cultural or behavioral
routine around and eliminating it altogether takes time and continuous
vigilance.
Experience has
demonstrated that actually the people in poverty are not in the situation they
are in because they are lazy. They
have the same abilities like anybody. They did not create the poverty within the
society. The system within which
they live created and sustained the problem. No one forces establishments like
banks to design their system so that only those already rich or own assets
benefit from them. In such ways the
poor will continue to remain poor.
Why does a
system make it difficult for people to get just some small help that may save
their single means of survival? You
can’t, for example, get a simple loan when your means of transportation to a
place of work breaks down, whether to the farm or office in the city. You just suddenly find yourself in a
dilemma, and the banks naturally do not help situations like these though
simple. If people go to seek help,
the loaner may place a big burden on the poor person, sometimes 50% interest on
the loan.
So programs
were developed with specific goals, where companies are built using social
goals. People who invested in the
program did that not for profit, but to require that companies show them how
effective they are in helping children improve themselves socially. The investors reserve the right to
get the amount they put in only, not more.
They can place the money for two years, three, or more to support the
program. The program invests in
getting children and women out of poverty through training and putting them on
the road to earning for themselves.
The bottom line for such companies is how many people, or children they have
helped, rather than how much money they made?
One other
benefit, Mr. Yunus observed is that social based businesses like his may also
repair the corporate culture of wastage and disposables. For example you start asking
questions as to why must our company buy packaging for products, wasting
resources to make disposable plates and carry out containers [some of them
colored with unnecessary designs].
You think that when competing with a local social business that cuts out such
waste. People suffer by paying
additional money for things that adds no value to them, while the environment
suffers. When we make alternatives to those containers through value added
savings and environmentally friendlier practices, other businesses engaged in
such discouraging behaviors will face competition from the socially responsible
businesses and would have to adjust.
In conclusion,
if anything, the Muhammad Yunus and Grameen Bank success should inspire others
to think hard and be creative in finding lasting solutions to their local social
problems. And when they get an idea,
they need to commit to it and invest in it.
There are usually thousands and even millions of ideas out there, the one
that will end up making a real difference in the lives of others, is the one
that its owner believed in himself, his abilities, and is willing to commit to
it, even if no one believes in his success.
You never know where your positive ideas could take you, until you
actually try.
(c) The Optimist Voice. All Rights Reserved.
