The Great Debate UK
Redefining good economic growth
- John Grant is brand and sustainability expert at Abundancy Partners and author of “Co-Opportunity“. The opinions expressed are his own. -
Speculative investment is something like a wobbly pin in the grenade of economics. It contributes to a lack of resilience because it pulls out every time there is a downturn. It also potentially creates a gap between the goals and ethos of a company and its ownership and financial obligations. So it’s encouraging that other formats are emerging than the company-as-a-vehicle-for-investor-shareholder returns. What I’m going to suggest is that in future most ventures could be social ventures.
As a new unit of capitalism, the success of social ventures is a highly significant development. The Grameen Bank’s founder, Mohammed Yunus, won the Nobel Peace Prize in recognition of a new way of being a business, which could literally have the potential to save humanity. Grameen Bank, which started in the village of Jobra in 1976, is owned by the community. There are by now also 18 other Grameen businesses, all independent social ventures designed to give employment opportunities and/or services to the poorest people.
Microcredit, the system of banking espoused by Grameen, alleviates poverty by giving small (micro) loans to individuals and small firms to invest in equipment or materials through which they can earn a living. It equips people rather than just making them dependent on aid. The astonishing thing (compared to conventional banking) is that these are loans without collateral. They are therefore in theory the riskiest sorts of loans going – a sub-sub prime, existing in harsh and volatile economies. Yet with microcredit there are astonishing high repayment rates – 99 percent is common.
That’s because it’s not dumb exploitation, it’s about human beings co-operating with goodwill, respect and trust. The community which owns the Bank does not guarantee the loans in the formal sense of group liability but functions instead to make sure no individual gets into difficulty with repayment and that their circle all behave responsibly. It’s one of many examples of succeeding by simply refusing to let society be like a machine.
There is a common experience of entrepreneurs that many others will readily recognise from the microcredit/Grameen model. You start with what you know of human nature, an inkling or initial design, but you are constantly evolving the living system to fit the way that people readily act, relate, think. That’s why I see the social venturing sector as significant beyond the bounds of commerce. It is inventing new ways of being human and achieving things together – of creating a system where the community drives the process.
Moreover, social ventures are an example of good growth. They are generative. They cannot grow fast enough, because they simply scale in proportion to the need. A recent development acknowledging that social and economic issues are intertwined is B-Corporation. This is a club of serious commercial companies with an equally serious commitment to social good. In other words it is a similar hybrid to social ventures, but with a degree of the formality associated with public companies. It is attracting well-respected pioneers like Method.
Transformative power of microfinance for women
- Sheetal Mehta is CEO and founder of not for profit organization Shanti Microfinance. The opinions expressed are her own. You can follow her on Twitter. Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2010, International Women’s Day. Please tune in.–
The women of the world still get the rawest deal. Throughout history, in places where life is tough for everyone, women still on average work for longer hours and take on the burden of the household chores. In its Human Development Report, the United Nations Development Programme reported that 70 percent of the people living on less than $1 dollar (65 pence) per day are women.
Development specialists have known for a long time that increasing the income of women is essential to poverty alleviation. All over the world women have been shown to spend more of their income on their households than men, so that when they are helped, the lot of the whole family is improved.
One of the biggest problems preventing poor women from improving their position is a lack of access to credit. If you are living on two dollars a day this doesn’t mean that you are paid this amount every morning.
One day you might get five, then receive nothing for three days. Income and outgoings are unpredictable; emergencies crop up. The poor need credit more than anyone else – and yet half of Indian rural households are denied formal loans.
That is why micro-finance is so essential – small loans of $20 to $50 dollars a day- have transformed life for many of the poorest. Ever since Muhammad Yunus loaned a Bangladeshi woman $27 to start a business in the mid-seventies, it is estimated that micro-finance has given 100 million people access to financial services.
Microfinancing would never have been a success without women. Investors have found that women’s repayment rates are typically superior to men, which has been essential in making the schemes viable.
Glass ceiling remains unbreakable by all but a few
- Lindsey Nefesh-Clarke is the founder of Women’s Worldwide Web – an online charitable organisation designed to help empower women with access to micro-finance loans, education, mentoring and networking. She has an MBA from ESCP Europe Business School and is a Board Director of Enfants d’Asie. The opinions expressed are her own. Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2010, International Women’s Day. Please tune in. -
As an educated European woman enjoying a fulfilling career, along with the majority of my female and male peers, the “angel in the house” curse and the “feminine mystique” malaise seem, in many ways, to have faded into history.
My peers and I can read the inspiring headlines “We did it” , knowing that women will soon constitute the majority of the U.S. workforce, knowing that there are nowadays more female than male university graduates in the U.S. and Europe, and that an increasing number of high-profile female role models are heading some of the world’s leading companies.
The courageous feminist struggles of our foremothers are not to be forgotten. But, in our new, post-industrial world, haven’t most of the critical legal and social battles for women like me been won? Isn’t it self-indulgent to bash on about the need to persist in the struggle for women’s empowerment and gender equality when my ostensible juggling act is to type a memo on my BlackBerry with one hand and operate the microwave with the other?
This International Women’s Day, I will be celebrating the heroism, resilience, resourcefulness, creativity and achievements of women worldwide, today and throughout history. Progress in women’s socioeconomic status over the past century has been monumental.
And yet, as we assess the hard-won accomplishments of women around the globe, one year before the centenary of International Women’s Day and following the 30th anniversary of the landmark Convention on the Elimination of All forms of Discrimination against Women, I can’t help asking whether this year’s International Women’s Day is less a cause for celebration and more a moment for sadness and acute concern.
Some facts: approximately 1.3 billion people live in absolute poverty and the majority of them are women; women work two-thirds of the world’s working hours but earn only one-tenth of the world’s income and own less than one-tenth of the world’s property ; nearly a billion people in the world are illiterate and two thirds of them are women; it is estimated that a woman dies every minute as a result of problems in pregnancy and childbirth, mostly in the global South, and the vast majority are preventable; one in three women worldwide is beaten, coerced into sex or otherwise abused ; it is estimated that 100 million females are missing from the planet as a result of sex-selective abortion, discriminatory nutrition and health care in childhood and routine violence against women, a “gendercide” that « far exceeds the number of people who were slaughtered in all the genocides of the 20th century » .
I’m looking forward to the “follow-the-sun” live blog on Monday, March 8th. It seems fitting, on International Women’s Day, to bring people together to ask how far we have come, in both hemispheres, and to think about how we can go further in our ambition to make the world a more fair place.
It’s exciting to see that the conversation is already inspiring connections between like-spirited people across the globe. Bravo to Reuters for initiating this blog.
There’s a school of thought that this is not new, but rather very old. The collateral that Grameen’s customers offer is that they belong to a community and they wish to remain in that community because they know how hard life will be outside it. In the West, where we have things like welfare programmes and bankruptcy laws, such a form of collateral can no longer work, so we need recourse to the other kinds.
The issue with this models is not whether they scale, but whether they translate. In an urban, industrialised, gragmented society, I’m not sure that they do.
Both this and the UK Conservative’s “big society” model argue that big corporations and big governments have squeezed out the old ways of doing things. To me, it seems just as plausible (if not more so) to say that big corporations and big government moved into the vacuum left when people stopped doing things the old way.