Jan. 24, 2008 at 1:52pm

Nobel Peace Prize winner Muhammad Yunus to start U.S. credit union

Posted by Jamie Chase in Banks Are Not Hated, Social Responsibility
Comments (2)

This was in response to my question to him during his recent visit to Seattle, “what lessons does he have to share with credit unions?”

As founder of the Grameen Bank, his work and motives have many similarities to American credit unions. People sometimes mistakenly call the Grameen Bank a credit union, but it is not. Grameen is a social business. It exists to serve without maximizing profit.

Yunus was loud and clear in Seattle and has been quoted before saying, “Grameen Bank methodology is almost the reverse of the conventional banking.” For example conventional banking is based on collateral, the Grameen system is collateral  free. Grameen methodology is not based on assessing the material possession of a person, it is based on the potential of a person. Can you imagine Bank of America giving a loan based on this methodology? Then again, what are your credit unions’ underwriting policies?

Using this as the response to the lesson that credit unions can learn from him is thought provoking. Why is Yunus evaluating the possibility of starting a credit union in the U.S.? Not because he thinks it is the best model.

It is the closest fit to the social business enterprise Yunus created when he founded the Grameen Bank.

Like credit unions, the goal of a social business enterprise is not to maximize profit, but created with a declared mission to maximize benefits to the people served, without incurring losses.

In his book, Creating a World Without Poverty, Yunus asserts that poverty can be eliminated, completely through social business enterprise. What message is in the book to explain why social business enterprise may have lessons for credit unions?

“Thus, competing social businesses will push each other to improve their efficiency and to serve the people and the planet better. This is one of the great powers of the social-business concept: It brings the advantages of the free-market competition into the world of social improvement,” from Creating a World Without Poverty.

Do you want to ask Muhammad Yunus and the Grameen Foundation your own question? You can.

Comments (2)

Muhammad Yunis should be the credit union industry’s national spokesperson.
1/28/2008 at 4:06 pm

1 | Left by Mike | Aug. 27, 2008 at 1:32pm

What a wonderful development! I hope his new CU comes together.
1/29/2008 at 1:59 pm

2 | Left by Mary Arnold | Aug. 27, 2008 at 1:33pm