Knowledge@Wharton: Our guest today is Muhammad Yunus, winner of the 2006 Nobel Peace Prize and founder of the microcredit movement -- based on the idea of making very small loans to the world's poorest people, thereby giving them the opportunity to raise themselves and their families out of poverty. Thank you for joining us.
Yunus: Thank you.
Knowledge@Wharton: People often associate good works and worthwhile causes with non-profit institutions. But you have emphasized that your model is a for-profit one, not a non-profit one. Can you briefly describe that model and tell us why the distinction is so important to you?
Yunus: We are not trying to create a non-profit. That was not our intention. Our intention was to persuade the bankers to lend money to poor people, so my struggle was always with the bankers. Initially, I offered myself as a guarantor, and then took the money from the bank and gave it to people. So it was an extension of the bank's activities. When we saw that it was working well and the banks were not as enthusiastic as we were, we thought maybe we should have a separate bank created for this purpose. Finally we did that in 1983 -- called Grameen Bank or the "village bank." So we became a bank because it is a bank's activity. We lend money to the poor. People sometimes refer to us as an NGO. We have to explain that we are not an NGO. It's not that we are belittling NGOs.... I'm simply stating that people get confused, thinking that because we work with the poor, we must be an NGO. I say, no, we are a bank and it is owned by the poor people. The owners of the bank are the borrowers of the bank. That's the distinction that we want to make, to clarify what we are.
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