Why Bonsai?

“Sometimes I describe poor people as the bonsai tree. If you take the seed of the tallest tree in the forest and put it in a flower pot, it grows only as big as the pot will let it. There’s nothing wrong with the seed; simply we did not give it enough space to grow.
Poor people are bonsai people. There’s nothing wrong with their seed, society never allowed them the space to grow as tall as everybody else.”
- Dr. Muhammad Yunus, Grameen Bank

From Microcredit:

16 Decisions

When provided with a loan, the borrowers have to memorize the following principals. The 16 decisions were created by some of the first Grameen borrowers to help with the educational, moral and spiritual upliftment of women.

We shall follow and advance the four principles of Grameen Bank: Discipline, Unity, Courage and Hard Work – in all walks of our lives.
We shall bring prosperity to our families.
We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest.
We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.
During plantation seasons, we shall plant as many seedlings as possible.
We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health.
We shall educate our children and ensure that they can earn to pay for their education.
We shall always keep our children and the environment clean.
We shall build and use pit-latrines.
We shall drink water from tubewells. If it is not available, we shall boil water or use alum.
We shall not take any dowry at our sons’ weddings, nor shall we give any dowry at our daughter’s wedding. We shall keep our center free from the curse of dowry. We shall not practice child marriage.
We shall not inflict any injustice on anyone, nor shall we allow anyone else to do so.
We shall collectively take on bigger investments for higher incomes.
We shall always be ready to help each other. If anyone is in difficulty, we shall all help them.
If we come to know of any breach of discipline in any center, we shall all go there and help restore discipline.
We shall take part in all social activities collectively.

10 Indicators (To Evaluate Level of Poverty)

By Muhammad Yunus
Every year GB staff evaluate their work and check whether the socio-economic situation of GB members is improving. GB evaluates poverty level of the borrowers using ten indicators. A member is considered to have moved out of poverty if her family fulfills the following criteria:

The family lives in a house worth at least Tk. 25,000 (twenty five thousand) or a house with a tin roof, and each member of the family is able to sleep on bed instead of on the floor.
Family members drink pure water of tube-wells, boiled water or water purified by using alum, arsenic-free, purifying tablets or pitcher filters.
All children in the family over six years of age are all going to school or finished primary school.
Minimum weekly loan installment of the borrower is Tk. 200 or more.
Family uses sanitary latrine.
Family members have adequate clothing for every day use, warm clothing for winter, such as shawls, sweaters, blankets, etc, and mosquito-nets to protect themselves from mosquitoes.
Family has sources of additional income, such as vegetable garden, fruit-bearing trees, etc, so that they are able to fall back on these sources of income when they need additional money.
The borrower maintains an average annual balance of Tk. 5,000 in her savings accounts.
Family experiences no difficulty in having three square meals a day throughout the year, i. e. no member of the family goes hungry any time of the year.
Family can take care of the health. If any member of the family falls ill, family can afford to take all necessary steps to seek adequate healthcare.

*Between 50-60% of Grameen borrowers get out of poverty within 5 years.

Zones of Microcredit

There are two types of microcredit programs:

Poverty Focused Microcredit - These are poverty-focused, collateral-free, low-interest microcredit programs.
- Green Zone - Interest rates equal market rate plus up to 10%
- Yellow Zone - Interest rate equals cost of funds at market rate plus 10-15%
Profit-Maximizing Microcredit
– These charge interest rates HIGHER than the yellow zone. These are basically money-lenders just out to make a profit off the poor. Since there is no regulations as to what microcredit means, they are riding the tails of good microcredit press at the detriment of the poor. Read this New York Times Article.
- Red Zone - Anything over market interest rate + 15%

The Robin Hood Effect

There is enough money within every community, it just needs to be redistributed to help everyone. We need to work towards creative ways to managed and invested within each community so that it eliminates poverty and revitalizes communities. Each Grameen Bank is usually profitable after just one year and also successfully using local savings accounts to give out local loans for those most in need. There is a cycle of money throughout the day. Funds are collected in villages each morning and disbursed every afternoon in the form of new loans.

*Another movement I like that is looking into creating vibrant communities by investing locally is the Slow Money Movement.

The Importance of Saving

Another important factor of Grameen is the fact that they have their members save money each week. They tell borrowers that most people will face a business failure, a natural disaster and a health issue in their lifetime, so it is important to put away a little each week in order to be covered in times of need.

Health Problems Lead to Bankruptcy

Grameen found that most members who were having a hard time repaying were facing a health problem at home. Just as is the case in the United States – the majority of bankruptcies happen when a family is facing a serious health problem. And that’s why Yunus started Grameen Kalyan. Healthy members = A Healthy Bank = A Healthy Country

Credit is a Human Right

To get started everyone needs a helping hand and a good support system. Microcredit is not a handout, it’s a hand up! Everyone has a right to certain resources.

Poverty is Not Inherent in the Person

Poverty is imposed on people by the system.

Women Get Deeds to the Land

Grameen borrowers who get housing loans also are required to get the title to their land. This simple yet radical idea has now helped over 700,000 women get the titles to their homes. This helps in a place where women could be put on the street in times of divorce or death.

Build Operate Transfer (BOT)

If you are interested in doing microcredit, you can hire Grameen Bank to help you get started. You don’t need to reinvent the wheel.

The American Dream

The American dream was that each individual could get started by pulling themselves up by the bootstraps and be entrepreneurial. Microcredit is successfully creating many “moms and pops”.

The Peace Prize

Muhammad Yunus and the Grameen Bank won the Nobel Peace Prize, not the prize in economics because alleviating poverty leads to peace. When people have no way of surviving, it leads to crime and war.

Microcredit is Just the Tip of the Iceberg!

Welcome to the World of Social Business!

7 Principals of Social Business

Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.
Financial and economic sustainability.
Investors get back their investment amount only. No dividend is given beyond investment money.
When investment is paid back, company profit stays with the company for expansion and improvement.
Environmentally conscious.
Workforce gets market wage with better working conditions.
Do it with joy!

“Whenever I see a problem, I immediately go and create a company.” – Muhammad Yunus

Yunus’ Companies:

Grameen Bank
Grameen Baybosa Bikash (Grameen Business Development)
Grameen Capital Management Limited
Grameen Communications
Grameen CyberNet Limited
Grameen Danone Foods
Grameen Fund
Grameen Green Children Eye Care Hospital
Grameen Kalyan (Grameen Healthcare)
Grameen Knitwear Limited
Grameen Krishi Foundation (Grameen Irrigation Project)
Grameen Mothsho Foundation (Grameen Fisheries)
Grameen Mutual Fund One
Grameen Phone
Grameen Shakti (Grameen Energy)
Grameen Shamogree (Grameen Products)
Grameen Shikkha (Grameen Education)
Grameen Software Limited
Grameen Telecom
Grameen Trust
Grameen Uddog (Grameen Check)
Gonoshasthaya Grameen Textile Mills Limited
Social Advancement Fund (SAF)

Everyone Wants to Give Back

Everyone wants to give back – it’s a part of being human. If you ask anyone around the world, there is a part of being human that wants to help others and give back. To only have business that is profit maximizing, we are limiting the full spectrum of the human spirit. Business can be and should be used to create vibrant communities that are thriving and taking care of everyone. Social business is enlightened business that looks at individuals and the system in a holistic (whole) way.

Links…

Yunus Networks by Chris Macrae

Social Enterprise Summit

Social Business on Wikipedia

The Social Business Blog

Social Enterpreneurs Listserv (nPEnterprise Forum)

Sustayne

Social Enterprise Associates

Social Enterprise Group

Feel Good World – University students committed to ending Hunger

Benetech

My friend, photographer Larry Dattilio took these photos of the Microcredit Program in Vietnam that the Rotary Club of Milwaukee is sponsoring. Portraits, Meetings, Work, Families, Places.

Universities offering Social Business

California State University – Channel Islands – Social Business Institute

Meridian University – Creative Enterprise

Books by Muhammad Yunus:

Banker to the Poor: Micro-lending and the Battle Against World Poverty (Muhammad Yunus, Public Affairs Books, 2003)

Creating a World Without Poverty – Social Business and the Future of Capitalism (Muhammad Yunus, Public Affairs Books, 2008)

Building Social Business
The New Kind of Capitalism that Serves Humanity’s Most Pressing Needs (Muhammad Yunus, Public Affairs Books, 2010)

Other books:

Give Us Credit – How Muhammad Yunus’s Micro-Lending Revolution is Empowering Women from Bangladesh to Chicago (Alex Counts, Research Press 1996)

Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World (Alex Counts, 2008)

Women and Microcredit in Rural Bangladesh (Aminur Rahman, Westview Press, 1999)

Replication of Grameen Bank Financial System (David S. Gibbons, Grameen Bank, 1991)

The Grameen Reader (David S. Gibbons, Grameen Bank, 1992)

Cloning Grameen Bank – Replicating a Poverty Reduction Model in India, Nepal and Vietnam (Helen Todd, Intermediate Technology Publications Ltd., 1996)

Halving Poverty By 2015 – We Can Actually Make It Happen (Muhammad Yunus, Commonwealth Institute, 2003)

Alleviation of Poverty is a Matter of Will, Not of Means (Muhammad Yunus, Grameen Bank, 1993)

Social Business Entrepreneurs Are the Solution (Muhammad Yunus, Skoll World Forum, 2006)

Women at the Center – After One Decade (Helen Todd, The University Press Ltd, 1996)

Empowering Rural Women – The Impact of Grameen Bank in Bangladesh (Rahnuma Shehabuddin, Grameen Bank, 1992)

The Price of A Dream: The Story of the Grameen Bank (David Bornstein, Oxford University Press, 2005)

Some Suggestions on Legal Framework for Creating Microcredit Banks (Muhammad Yunus, Grameen Bank, 2003)

Microcredit: Banking With the Poor Without Collateral (Muhammad Yunus, Grameen Bank, 2006)

The Poor Always Pay Back – The Grameen II Story (Asif Dowla and Dipal Barua, Kumarian Press, 2006)

Introduction to Grameen II (Abdul Hai Khan and Md. Abdul Wahab, Grameen Bank, 2003)

Grameen Dialogue: Newsletters 1-50 Volume 1 – Emerging Ideas, Concepts & Theories (Khalid Shams, Grameen Trust, 2005)

Grameen Dialogue: Newsletters 1-50 Volume 2 – The Replication Experience (Khalid Shams, Grameen Trust, 2005)

Information Technology To Eliminate Global Poverty (Muhammad Yunus, Grameen Bank, 2002)

Poor, But Strong – Women in the People’s Economy of Bangladesh (Karl Osner, Grameen Trust, 1997)

Demand and Marketing Aspects of Grameen Bank (Atiur Rahman, Grameen Bank, 1994)

Half the Sky (Nicholas D. Kristof and Sheryl WuDunn, Random House, 2009)

Partner to the Poor (Paul Farmer, University of California Press, 2010)

Pathologies of Power: Health, Human Rights, and the New War on the Poor (Paul Farmer, Berkeley: University of California Press, 2003)

How to Change the World – Social Entrepreneurs and the Power of New Ideas (David Bornstein, Oxford University Press, 2007)

You Can Hear Me Now – How Microloans and Cell Phones Are Connecting the World’s Poor to the Global Economy (Nicholas P. Sullivan, Jossey-Bass, 2007)

The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World (Jacqueline Novogratz, Rodale Books, 2010)

Begging for Change: The Dollars and Sense of Making Nonprofits Responsive, Efficient, and Rewarding for All (Robert Egger)

Building Wealth: The New Asset-based Approach to Solving Social and Economic Problems (Aspen Institute of Human Studies)

Business Planning for Enduring Social Impact (Andrew Wolk)

Enterprising Nonprofits: A Toolkit for Social Entrepreneurs (J. Gregory Dees)

Forces for Good: The Six Practices of High-Impact Non-Profits (Leslie Crutchfield and Heather Mcleod Grant)

Generating and Sustaining Nonprofit Earned Income: A Guide to Successful Enterprise Strategies from Jossey-Bass (Editors: Sharon M. Oster, Cynthia W. Massarsky, and Samantha L. Beinhacker of the Yale Schoo of Management – The Goldman Sachs Foundation)

In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty (Michael Fairbanks, Malik Fal, Marcela Escobari-Rose, and Elizabeth Hooper, Templeton Press)

Lasermonks: The Business Story Nine Hundred Years in the Making (Sarah Caniglia, Cindy Griffith)

Life Entrepreneurs: Ordinary People Creating Extraordinary Lives (J-B Warren Bennis Series) (Christopher Gergen)

Make the Impossible Possible: One Man’s Crusade to Inspire Others to Dream Bigger and Achieve the Extraordinary (Bill Strickland)

Making Ideas Happen-Overcoming the obstacles between vision and reality (Scott Belsky)

Melwood: A Story of Empowerment (Earl Copus Jr.)

Migrating from Innovation to Entrepreneurship: How Nonprofits are Moving toward Sustainability and Self-Sufficiency (Jerr Boschee)

Mission, Inc.: The Practitioners Guide to Social Enterprise (Kevin Lynch, Social Venture Network)

Selling Social Change (Without Selling Out): Earned Income Strategies for Nonprofits (Andy Robinson, Kim Klein)

Social Enterprise: A Global Comparison (Civil Society: Historical and Contemporary Perspectives) (Janelle A. Kerlin, Editor, Tufts)

Social Entrepreneurship : The Art of Mission-Based Venture Development (Peter C. Brinckerhoff)

Social Sector Entrepreneurship and Innovation (Warren Tranquada; John Baker & John Pepin)

Strategic Tools for Social Entrepreneurs: Enhancing the Performance of Your Enterprising Nonprofit (J. Gregory Dees, Jed Emerson, Peter Economy)

Tactics of Hope: How Social Entrepreneurs Are Changing Our World (Wilford Welch)

The Cathedral Within: Transforming Your Life (Giving Something Back) (Bill Shore)

The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World (John Elkington, Pamela Hartigan, Harvard Business School Press)

The Social Enterprise Sourcebook (Jerr Boschee)

Transformational Philanthropy: Entrepreneurs and Nonprofits (Lisa Dietlin)

Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Civil Society: Historical and Contemporary Perspectives) (Dan Pallotta)

Venture Forth! The Essential Guide to Starting a Money-Making Business in Your Non-Profit Organization (Rolfe Larson, Amherst H. Wilder Foundation)