Rebuilding Through Social Entrepreneurship

Linked with our presentation on Mohammad Yusuf – Bangladesh.

Muhammad Yunus has helped millions of people lift themselves out of poverty in rural Bangladesh. His mission began when he realized that while he was teaching advanced economic theories, people were starving in the streets due to a terrible famine.

Muhammad Yunus tells us: On television in Bangladesh, I watched with great sadness the horrors Katrina unleashed on New Orleans and the Gulf Coast. I was so tempted to be there to participate in post-disaster activities, as we have so much experience with these kinds of disasters (see Grameen Foundation USA). But I knew my American friends did, too. Having studied at Vanderbilt and traveled extensively in the affected areas names of places and faces of people were so familiar. A friend of mine from Ecuador even sent me a picture taken in Biloxi 39 years back to remind ourselves that we were there!

The post-Katrina recovery is time to tap the social entrepreneurial spirit of Gulf Coast. Based on lessons from years of disastrous floods and cyclones in Bangladesh, I have witnessed the resilience of people and the power of communities if organized and tapped. We need to remove the obstacles and barriers to unleashing people’s creativity and participation in the reconstruction and rebuilding of their homes, businesses and lives.

In starting a small business or building a house, having collateral and a clean credit report to get a bank loan is often an insurmountable barrier for many people around the world, whether in Karachi or New Orleans. But not in Bangladesh thanks to Grameen Bank and a growing number of microfinance organizations that provide collateral-free loans to the poorest for self employment, small enterprises and housing. And I am happy to report that a growing, global movement of microfinance organizations in more than 100 countries are following suit.

The United Nations declared this the Year of Microcredit to focus attention on the scaling up of this solution. The Microcredit Summit Campaign, launched in 1997 at a time when we were reaching only 7 million people, is ready to announce next year that we have achieved or come very close to reaching 100 million of the world’s poorest families, especially the women, with credit for self employment and other business services by the end of this year. What does this mean for the Gulf Coast?

Credit for self employment and small business enterprises as well as housing finance must be a part of the recovery package for the Gulf Coast. Savings and other financial services should be a part of these programs as they are in good microcredit programs and in Grameen Bank.

There are empowering ways to structure and deliver these programs that respect the dignity and capacity of people. This is critical to preserve, protect and promote. The social capital of the Gulf Coast must be used to rebuild the communities in ways that strengthen it. We can never let it dissolve into violence and chaos again. Grameen works in self-organized groups of five, who then come together in centers of 10 to 12 groups. They become the unit where the business is transacted. They also provide peer support and solidarity. This will be very important during the recovery period. People can help and learn from each other as they embark on the long road to normalcy.

Before Katrina, people in New Orleans were already expressing interest in social entrepreneurship. Not long ago, more than 500 people including the Mayor came to hear a talk at Tulane University about Grameen Bank and other social entrepreneurial initiatives. Before Katrina, people in New Orleans were organizing in groups known as Prosperity Clubs and were exploring starting a Grameen-like program. They had just opened a new branch of a credit union in Central City. They were planning to introduce entrepreneurship into the curriculum in high schools and encourage student ventures.

Even though the area lacked big business, the people knew that they had the strengths within them to foster opportunity where economic apartheid had created deep inequalities and resentment.

I know that Bangladeshis are good credit risks in spite of disasters like floods, because they will always rebuild. They are deeply attached to their villages, their place. I see the same love of ones community coming from the people in the Gulf Coast. This is a resource that must be tapped.

My most important piece of advice: create a Social Business Initiative Fund with a portion of the money being allocated for generating innovative ideas. Social businesses are businesses operated with social objectives, rather than money-making objectives. These are non-loss businesses to maximize benefits to the community without losing money. Encourage local people to come up with business ideas for rebuilding and improving their communities that will also create jobs. Back those social entrepreneurs—people who bring business discipline and metrics to creating positive social change. This will channel entrepreneurial talent not for short-term financial profit and personal gain but for solving social problems and accomplishing a public purpose.

These ideas can draw upon business skills and use market forces. There is no shortage of money. But we need business ideas to make this money work for people. There are many creative ways to use all of the money that the public and government have pledged for the victims of this disaster. Some institutions for change should be capitalized so that they may continue working for generations to come. Now is the time to unleash the spirit of social entrepreneurship.


Poverty Action Lab of MIT;

Poverty Program to the test;

The Grameen Foundation USA

Heroes for a better world

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