“Human beings are born as entrepreneurs.”
– Muhammad Yunus
Muhammad Yunus is an entrepreneur with a difference, he has revolutionised the way that many people think about wealth, poverty, success and entrepreneurship.
He is often known as the leading pioneer in the areas of micro-credit and micro-finance. These areas involve providing small business loans to women (often under $1,500) so that they can launch their own business enterprises.
Initially Yunus wanted to protect women from extortionate lenders of money sometimes called ‘loan sharks.’ These loan sharks would lend money at exceptionally high rates of interest to people who would be ignored by traditional banks and lending institutions. To get around this problem he would lend the women the money himself out of his own pocket, and because he did not have a huge financial pool of capital he kept the loan amount small to accommodate his own resources at the time. He began doing this by himself in 1976 and his company the Grameen Bank has expanded to manage assets of over $1 billion.
The interesting thing about Yunus was that he did not come from a traditional banking or finance background and that is why he could start a financial institution that operated differently from other banks.
“Once I learned what the rules of the traditional banks were then I just did the opposite and it worked. They go to the rich, I go to the poor. They go to men, I go to women. They trade in the city, I go to the village. They ask for collateral, I say forget about collateral.” – Muhammad Yunus
Yunus offers important insights for any entrepreneur to understand and that is to see opportunities where others only see problems. He also took action with his own resources and did not wait for permission to begin putting his ideas into practice.
The Grameen Bank expanded to other parts of the world and covers areas such as energy, telecommunications, investments, software, knitwear, and education to name a few.
“My greatest challenge has been to change the mindset of people. Mindsets play strange tricks on us. We see things the way our minds have instructed our eyes to see.”
– Muhammad Yunus
Yunus states that poverty is not created by people who are ‘poor’ but by institutional forces that impose conditions on to those people. He uses the example of a bonsai tree.
The bonsai tree is ‘shaped’ and ‘conditioned’ to grow to a particular size, then when the bonsai tree is at the desired size for the tree its growth is restricted and it is placed into a pot that only has enough soil for it to grow a small amount. The tree is shaped further and pruned until it becomes ‘natural’ for it to remain at that size.
“Business is a very beautiful mechanism to solve problems, but we never use it for that purpose. We only use it to make money. It satisfies our selfish interest but not our collective interest.” – Muhammad Yunus
Yunus states that 99% of the wealth belongs to 1% of the people in the world. I am not sure if this is true. My research has shown figures from 50% to 99%, however Yunus is certainly correct when he says that this situation is not going to remain so ad infinitum and that this situation is a ticking time bomb that when released will spark a revolutionary change in the world of the likes which will make COVID-19 look like a very tiny and insignificant blip because that revolution would affect literally every single major institution on the planet and they would be forcibly taken apart along with those societies.
This may not happen in the next year or even the next 50 years, but we know that it will arrive one day and the last 100 years will certainly not mimic the next 100 years.
Yunus also states something that gets at the heart of the industrial age paradigm of an employer to employee paradigm.
“A job is an obsolete idea.” – Muhammad Yunus
This position by Yunus states an entrepreneurial perspective that is required for people to solve their problems. It is interesting when we look at the position that Yunus takes and how it differs from traditional education. Yunus calls an entrepreneur a ‘natural’ human being, while the societies that were shaped by The Age of Enlightenment that flourished between the 17th and 19th centuries were firmly against ‘natural’ human beings.
“Human beings were not put on earth to work for anybody.” – Muhammad Yunus
Yunus states that artificial human beings are those who live to work for others. It is also out of the enlightenment age that we see the creation of the job as we know it today. The first corporations were founded in the 17th century along with the original Amsterdam Stock Exchange. Here we first see the birth of ideas such as joint stock investors, stocks, bonds, and securities.
“Unemployment is only created through the concept of employment” – Muhammad Yunus
It is interesting to observe that much of the thinking that predicts the way of the future is geared around ‘artificial intelligence’ and there does not seem to be much of a place for the human based on this paradigm. I remember hearing the story of a psychologist asking a patient to draw a picture of himself, and when the patient handed the psychologist the picture he had left his own major body parts out of his drawing.
In an age dominated by ‘artificial’ intelligence who will provide the ‘real’ intelligence?
“Your school education converted you into an artificial human being, and now all you can think about is how to get a job. A job is not the destiny of a human being.” – Muhammad Yunus
Yunus started the Grameen Fund, a not-for-profit venture capital company that differs from any in Silicon Valley or anywhere else that I know of. The Grameen Fund is not interested in receiving dividends of equity from the companies that it invests in. The fund is only concerned with helping the entrepreneurs to solve the business problems that they have.
The Grameen Fund has two rules
1. No idea is rejected
– Yunus states that each entrepreneur works with the bank to improve their ideas until they have a viable solution.
2. Nobody is abandoned
– Yunus states that failure is part of an entrepreneurs journey and they help the entrepreneurs to pivot until they are successful. Because the amounts of capital are small that keeps the element of risk low for the bank in having to produce a certain number of successful businesses and they can develop the entrepreneurs.
“A job takes away your creativity. In a job your purpose is to satisfy your boss.”
– Muhammad Yunus
The French economist Jean-Baptiste Say proposed the idea that an entrepreneur shifts economic resources out of an area of low productivity into an area of higher productivity and greater yield that will provide benefits.
Muhammad Yunus has shown that entrepreneurship does not have to be implemented in one particular way in order to be successful and there is a need for many more entrepreneurs around the world to take on the responsibility to create the world that they want to live in for the future.
Yunus explains more about his work and his book A World of Three Zeros.
Prof. Muhammad Yunus: A World of Three Zeros – The New Economics of Zero Poverty
Entrepreneur: Muhammad Yunus
Book: A World of Three Zeros
Business: Grameen Bank