An Exclusive interview with Dr. Muhammad Yunus, Nobel Laureate 2006

An Exclusive interview with Dr. Muhammad Yunus, Nobel Laureate 2006
Microfinance Focus

Dr. Yunus gave an exclusive interview to the “MICRO FINANCE FOCUS –  a global  magazine on micro finance  and sustainable development”  at the Reception Dinner on 30th  March 2009  on the eve of the Sa-Dhan’s National Micro finance Conference  2009 being organized  at New Delhi.

Here are the excerpts from the interview:

MF FOCUS: Microfinance is an established and recognised instrument for fighting poverty today. Many people are confident and it gives hope, poverty can be eliminated. Isn’t it too simple just to rely on microfinance?

Dr. Yunus: You don’t have to. Nobody is forcing you to do that. If somebody wants to do Microcredit – fine. I wouldn’t say this is something everybody should have. Nobody says it is the only solution. Human beings are very multidimensional. Microfinance is one of the many, many things.

MF FOCUS: Social business is an additional way.  Do you identify enough potential for social business to make a real difference, globally?

Dr. Yunus: Yes of course. Definitely it is a global and not a local issue. There are two kind of businesses: One is business to make money, the other business is to change the world. The one with the intention  of changing the world and not to have any personal gain from that. It is all dedicated to make a difference. It is addressing a social issue. Resolve it, you can do that.

MF FOCUS: What are all the factors making social businesses successful?

Dr. Yunus: A good business plan, good  ideas and use the creativity in the most creative way.

MF FOCUS: Microfinance as well as Social businesses have to be highly efficient. How is it possible to maintain or re-introduce the social mission back into microfinance?

Dr. Yunus: Whenever something gets popular, actually catches attention, there are people who take  advantage of that and misuse it. It happens in everything. When Big brands are popular, it gets imitated by fake ones. Same thing happens with microcredit: People name it microcredit but in fact it is not microcredit. It is something completely different.
People have to be made aware of  what is microcredit and why it is important to stick to the real microcredit and not one which has a different motivation.
But while you are looking at the microcredit itself, even good people may have wrong ideas, which makes them shift away from the whole idea, the mission. You have to be very carefully remind ourselves, what is our mission. That is why we have meetings like this, to rediscover your mission and then re-adjust your work to the mission.

MF FOCUS: To build an enabling environment for social entrepreneurs, what  governments should do and what regulations do you count as important?

Dr. Yunus: It is very important. Very Importnt!!  Regulation is very important but at the same time regulation can be stifling, destroy the whole business by overregulating and make it impossible to function. It is like a mother and a child. You know how you have to  change  your child to do the right things. At the same time you should not  control your children so that it loses all its initative. It is like becoming a prisoner in the hands of the mother. Regulation should be promotional, a Cheerleader. At the same time making sure you do the right thing, that you don’t drift away from the real principles. It is a tough job in the sense you have to balance both: How to encourage, and at the same time how to restrain.

MF FOCUS: Due to the financial and economic crisis development funds were cut by the north. Where do you see the responsibilty of rich countries in fighting poverty? Where should they act?

Dr. Yunus: See…The  southern countries  didn’t create the crisis, they are the victims of the crisis.It is only one country which created the crisis and it spread all over. Those who were involved in creating this crisis also have a moral responsibility to make sure that the victims are supported .  There are lot of people suffering, that has to be taken care of.
Now they are busy of making bailout packages and all the support. And i am saying …At least 10 % of all bailout packages every where  should be earmarkerd for   victims in the third world. Those things have to be built in the system.

MF FOCUS: Apart from poverty there are many topics, which can be solved or bargained only on an international level: Climate Change for example. Nicholas Stern is convinced, we have to solve both topics together: Poverty and Climate Change.

Dr. Yunus: Well, financial crisis is  the latest crisis. 2008  had the food crisis, which is still here. Simply front pages have been taken over by financial crisis and has pushed away all discussion about the food crisis. 2008 was also the year of energy crisis – the oil prices  shot up to the sky. It didn’t disappear, it is lying low for a while. And also this is a perpetuating environmental crisis. All these crises have their roots in the same thing. These are not seperate crisis. You have to adjust the root causes than you are adjusting all of them.
The root causes  are the wrong structure, the capitalism structure we have. We have to redesign the structure we are operating in.
Wrong, unsustainable lifestyle. We have to take the hard decision ! We and each one of us must take a decision on this planet. And also we should inculcalte among our children a simple way of living. We should not live in a way, that it harms another person. Once you take this decision, everything will be solved. We have no right to live a life which is harming anybody else. It is like traffic laws: You can’t have a car and knock everybody off the road. There’s a rule you have to drive safely, so that you don’t harm anybody. Same thing is for living on this planet. We are sharing with each other.

MF FOCUS: Grameen Bank has moved to grameen II methodology, still Grameen replicators in India follows the Grameen I model. Do you think they should explore such flexible methodology?

Dr. Yunus: It is upto them, what they like….. I can not advise.  We thought  we can solve some of  the  problems.  we see the opportunity that we  have by relaxing  our procedures and rules   to make it more friendly.

MF FOCUS: What is the next level for Micro finance and how to take it forward?
Dr. Yunus:  Next level is to enter into Insurance, pension funds, second generation issues young children coming up…. growing up…………….. to make them into better citizen to deal with life.

MF FOCUS: Savings product is much needed by the poor. Regulation is cautious not to allow  collection of  savings by certain category of MFIs. What is your opinion?
Dr. Yunus: Savings product is very important. Change the law!!!    Keep on insisting that the system is right.

MF FOCUS: With Micro finance focus, the monthly magazine, we are working on information exchange and promoting Best practices. How important are projects like Micro finance focus for the sector.

Dr. Yunus: Yeah ! This is a good initiative.   Communicate……  I mean…..  Let the people know what is happening, what is right, what is wrong, so they can participate in debate, discuss, make more efficient, more cost effective and more friendly to take home.