11.2 Social Business for Profit without Dividends

Professor Yunus got his PhD in economics from Vanderbilt University in the US and was professor of economics at the Chittagong University in Bangladesh. In his book Creating a World without Poverty he defines very clearly what a social business is and what it is not. In terms of money, the key characteristics are:

  • Social businesses are not charities, i.e. they make money and thus are profit oriented
  • Social businesses re-invest the profits from their activities, i.e. they don’t pay dividends to their investors
  • During their operation and from their profits, social businesses pay interest to their investors but they don’t perpetuate usury by compounding interest payments and extracting dividends on top of interest charges.

To run Grameen Bank as a social business is a model for “usury-free banking”.

To create social businesses a la Grameen Phone and Grameen Solutions or Grameen Knitwear is the remarkable outcome of an admirable professor of economics turned banker and entrepreneur.

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