Lessons from the pioneer in Microfinance

Leer en Español:Colombia: Premio Nobel Muhammad Yunus visita Bogotá 

Professor Muhammad Yunus, the founder of the Grameen Bank and the Nobel Prize Laureate in 2006, visited Colombia as a Counsellor for the One Young World conference in 2017. The venue aimed to connect and advance a socially responsible and sustainable sector in the country so forward-thinking institutions and individuals could meet and discuss.

The Nobel laureate is known as “a banker for the poorest of the poor”; his work dynamic aims to create economic and social development through the structuring of micro-credits so a wider range of the population can kickstart their own venture. For more information read <microcredit>

These are the key messages from Muhammad Yunus to the Colombian social sector, which applies to other Latin American industries as they share deep interconnections.

1. Need means want

Today’s economics are seeing a rapid change from the traditional model that created the “Homo Economicus” as it’s archetype. Today’s economic models include errors and common non-rational behavior; economics are turning quickly IGNORE INTO psychology.

IGNORE INTO a newer economic perspective, the link between net worth and default probability is not linear. Grameen Bank decided to trust a rural woman with no collateral so both a new market was created and general perception of those with financial needs associated with poor financial habits was challenged.

2. More is desirable

A social business requires a mixture of deep sense of social conscience and a developed instinct to identify opportunity. Capitalism is not outlawed, it just has been updated. Great social business can have the same economic aspirations of a non-socially oriented as it is sustainable and creates social good.

Muhammad Yunus’ model for microcredit created a vast network of loyal clients that were on a quickly changing positive slope of income. Feeling the opportunity, Grameen Bank launched Grammer communications, which quickly became the largest mobile services provider in Bangladesh.

3. Connect

Based on the math, linear systems create an outcome for an input and their growth will remain linear unless cooperation is achieved. Cooperation creates complex systems as different agents are able to communicate dynamically, resulting in a vast number of outcomes that a linear system could not consider.

Success for social ventures in a coordinated and fast-paced environment requires entrepreneurs to be aligned with the global mechanisms that lead to investment. The world defined an agenda in 2015 that will pave the way until the year 2030.

The United Nations created the UN Global Compact, an association for ventures and social businesses that gathers prominent leaders that sign up in favor of human rights, proper labor conditions, and the environment.

The UN Global Compact has a strong position against corruption.

Latin American Post | David Eduardo Rodriguez Acevedo

Copy edited by Susana Cicchetto