Building Social Business by Professor Muhammad YUNUS. Analyzing the Advantages and the Limits of Microcredits

Seminar paper from the year 2016 in the subject Business economics - Miscellaneous, grade: A, ( Atlantic International University ), course: SEMINAR ADMINISTRATIVE DEVELOPMENT, language: English, abstract: A social business is a new type of businesses designed by Professor Muhammad Yunus to serve social purposes. Yunus was a former economics professor at Dhaka University, and the founder and managing director of Grameen Bank (lenders of microcredits to world’s poorest) who won the 2006 Nobel Peace Prize. A social business is an alternative against poverty and its objective is to make the poor participate in the process that helps them get out of that situation of slavery- poverty- by causing them to become micro entrepreneurs who increase their income in order to become independent people. The process will eventually change their living conditions and living standards.In Yunus’ words there are two kinds of social businesses. The first category is one that is a non-loss, Non-dividend Company whose main purpose is basically a social goal. The second category is a profit making company possessed by poor people devoted to a well-defined social cause. Besides, social businesses must be self-sustaining and its owners have to be dedicated to never take any dividend beyond the return of the original amount they put in the business, Yunus. Above all, his book is very amazing as Yunus proposes a new model to solve the problems of poverty, not with more charities but with the creation of social businesses. Charities on the contrary encourage dependence and have not resolved the issue of poverty until now.In that perspective, Yunus (2010) sustains that for years governments have been incapable of solving the problems of poverty. Conversely, the number of poor people has increased over the years. This clearly illustrates that solving the issue of poverty is not only to be a governmental solution as governments have proved to be incompetent in this respect. Another solution was to be found, it is the one he proposes in his book. In fact, social businesses have become so successful that traditional capitalism is thinking somewhat how to shift the way things have been handled on their part so far. As an illustration, Yunus (2010) thinks that social business is a new type of capitalism that will help humankind to overcome poverty and have a better life.