I am a firm believer that all humans are entrepreneurs. Two-thirds of the world's population are not eligible for bank loans. What kind of system is that?
I started this work with micro loans quite accidentally. Loan sharks in Bangladesh were making local villagers miserable. So I made a list of all the people that owed money to these loan sharks. And the total amount owed was just 27 dollars. I had no idea that people had to suffer so much for so little.
I went to the banks and told them about the loan sharks. The banks said to me, "we don't lend to poor people. They are not credit-worthy."
Who created poverty? Poverty is not in the human being because we were all born the same. Poverty is created by the institutions that we build. If you fix the institution, there will be no poverty.
When we started Grameen Bank in 1976, only one per cent of Bangladesh's conventional bank loans were made to women. We wanted to make sure half of the borrowers at Grameen Bank were female. Today 97 per cent of our borrowers are women.
Lending money to women in Bangladesh is not that simple. When you go to a woman she will say "don't give the money to me. I don't know anything about money. I've never handled money in my life." That's not her voice. It is the voice of history.
We lend $1bn a year. No money comes from outside investors. We take deposits and lend. Each branch is self-reliant, which means we are the soundest financial institution in the world.
People ask me how did you design all the rules for Grameen Bank. I say it was simple: all we did was look at how conventional banks do it and do the opposite.
Conventional banks go to the rich—we go to the poor. Conventional banks ask for collateral, we say "forget about collateral". And conventional banks use lawyers, we say "forget about lawyers".
We also help beggars. We say "as you go door to door begging for money, take these cookies to sell, or toys for the children and sell those". We have 100,000 beggars doing this. More than 11,000 of them have given up begging completely. The remaining 90,000 are part-time beggars. They know which house is good for selling and at which house it is better to beg. So they have learned market segmentation.
Grameen Danone is a social business. We produce yoghurt for the millions of malnourished children in Bangladesh. If a child eats two cups of this yoghurt every week, within nine or 10 months that child will get back all the nutrition it has lost. That is our goal.
Once you move from a profit-making business to a social business something happens: your costs go down. You don't need any fancy packaging for the yoghurt. You don't need any expensive advertising, because you have no competition.
The amazing thing about social business is that all you need to do is design a prototype. Once it works, all you have to do is replicate it many times. You develop a seed.