New “social business” is the medicine for the economic crisis, Yunus thinks

Nobel Peace Prize Winner for 2006 Muhammad Yunus, who created Grameen Bank - the most popular bank for micro-lending in the world, declared in Milan the start of the initiative for setting up a micro-lending bank in Italy jointly with UniCredit Group, the Group’s foundation Unidea, Gramee Trust and Bologna University. The project was started after one year survey conducted by a working group on the need and applicability of the Grameen model in the developed countries.

Asked at a conference in Milan about his opinion on the world economic crisis, Yunus replied that the crisis gives a unique chance for change. “We understand the need for change only after things go wrong. I think that under the present situation there is a chance to make a positive change”, he pointed out in his speech and presented his ideas about “social business” as a medicine for the present crisis. In his opinion “the challenge” will be “to modernize the business model so that it gives the desired social results in an efficient way with good cost management”. Yunus defended Grameen bank’s business model saying that although Grameen bank lends money to people usually considered ineligible by the Banks, it generates a stable profit and for more than 15 years it has not relied on donor programs for developing its activity.

Grameen Bank is a micro-lending institution established in Bangladesh in 1976 the main purpose of which is micro-lending to entrepreneurs who typically do not fulfill the requirements for a standard bank loan. For his work Muhammad Yunus was awarded in 2006 the Nobel Peace Award. Grameen Trust is a non-profit organization, the main role of which is to disseminate Grameen bank’s micro-lending model. Currently Grameen operates in 28 countries worldwide. The Bank was initially present in the developing countries, but is now expanding its operations to the West. Grameen America was set up in New York in January 2008.