NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

The pioneer of microfinance, Muhammad Yunus, was awarded the Nobel Peace Prize in 2006 for his work with the Grameen Bank. Also known as the “Bank of the Poor”, the Grameen Bank provides access to finance for people who are unable to qualify for a traditional loan.

Since its inception, the bank has disbursed more than 20 billion US dollars. While some widely claim that microfinance has alleviated millions of people out of poverty, the actual impact of Yunus’ creation remains controversial and nuanced in academia.

However, Yunus’ invention of the concept of ‘social business’ is slightly less controversial. The Nobel prize laureate is known for more than just microfinance; he’s also widely known for his new vision of our capitalist society.

The Bangladeshi economist defines a ‘social business’ as a company which was created to address a social purpose. Beyond making money, this enterprise’s primary aim is to address an injustice that exists in our society. The ends is not profit maximization, but rather, maximizing society’s welfare. To those already acquainted with the status quo, Yunus’ vision may seem idealistic and out of touch.

Photo courtesy of University of Salford Press Office.