Coke telling workers that spending office time on basketball brackets is not just ok but patriotic -odd that a brand which once bulit the future of the america is now championing national loss of productivity

What is Being Greenwashed? When did greenwashing start to become the greatest risk to the purpose of brand leaders

Saddest cases of greenwashing

Greenwashed is when an extremely purposeful organisation sells out its reputation to a large purposeless organisation. Charities are at particular risk to this as corporations with a PR problem will pay millions of dollars to partner the other's trusted reputation. The consequence is that the charity will lose its way and become ever less economic in its essential community-service goals- in a networking world charities that lose the way actually end up harming their original purpose, and destroying the hope both of volunteers and the customers they most desparately needed to empower on the ground

My books on chartering brand architecture at the end of the 1980s were among the first to explain what actions to take to innoculate a pursposeful organsiation from greenwashing - a process that is often milsleadingly called Corporate Social Responsibility. This is one of many misnomers that infested branding from the late 1980s when totally false brand valuation algoritmh were invented and the big 5 global accountants endorsed this unreality as part of their systemic failure to owning up to not having metrics relevant to:
valuing goodwill as multi-win modeling
sustainability as an expoential impact metric through time that defines a system's compounding dynamics
transparency mapping as a board's duty to detect emerging conflicts bewteen different parties to a value exchange  and to urgently resolve such before they dilute a brand's leadership essence

I was able to write these books as I spent the 1980s on a worldwide project that emerged out of MIT's early database software  interviewing millions of people on what societies most wanted from the world's biggest brands. The gap between wants and what the world's biggest organisations were serving was getting ever bigger partly because of the erroneous maths of the Big 5 accountants (who were racing to achieve monopoly control over the world's largest boardrooms). At the same time most companies were focused on far too many product brands to economically make the transition from multnitaional to global world, and did not have any usable visioning processes for leaders to connect the corporate brand with the organisation's unique purpose. Thus PR agencies recomended to CEOs that they sponsor a marriage with a charity with a high reputation, and the disastrous ipmacts of greenwashing have spun ever since

Exercise: most of the wpr;d's biggest brands stand or fall on what youth perceive. So as millions of alumni of this 12 minute training session, why not swarm on one big brand leader at a tme and audit how much he is greenwashing - make it clear you will simultaneously boycott the brand unless the ceo offers 

Probably the saddest case of greenwashing involves microcreditsummit. Founded in 1997 to understand how youth investment banking could advance the greatest millennium goals the net generation wanted to co-produce, this network got greenwashed by the very big banks that were to spend the 2000s bubbling up the youth employment slump of the 2010s. Now that the 2010s could be the most productive time for youth to be alive http://www.wholeplanet.tv/ the West is stuck in old peoples and big bankers and top-down congresses' debts.

THE REDWASHING OF NATIONS
At a time when 10 times more youth productvity than ever before could be invested in, ratings agencies who say that hi-debt nations need to value austerity are committing the greatest maths error ever propagated. A nation's future should be ranked on how well it is investing in net generation productivity and worldwide collaboration in youth's millennium goals. If you wish to urgently help resolve this crisis, a starting point is building the pro-youth curriciculua at www.grameeneconomics.com

... 

WHY HI-TRUST MEDIA IS EVERYONE'S SOCIAL BUSINESS
If you wish to join our club of Future Correspondents,  we ask you to face up to one responsibility which may be bigger than our words can describe.

Celebrate your ability to identify forbidden questions,
... and once you've found a decent quest, live to help others understand why unlearning can be a greater first step for freedom than the rush to know it all.

MEDIA'S CRISIS OF IDENTITY
The simple way to innooculate you and yours against being trapped by any media is to ask : what are the forbidden questions of the particular media before you and your communities get involved.

URGENCY
We believe the happiness of the human race depends on correspondents acting with informed optimism. Informed means to us having a mapmaker's concern for exploring risks before enthusiastically guiding others.

In the 2010s, one vital forbidden question to make free again is: why did the 20th C's greatest mathematicians care so much about humans everywhere debating ahead of time the consequences for that first networked generation which technology makes more interconnected worldwide than separated? We suggest that previously when civilisations collapsed they did so separately. We recommend sharing a common sense meaning of globalisation is: that time of human development when the collapse of one civilisation means the collapse of all.

EXCITING 2010s: Time is Now
And, we believe it is useful for all future corespondents to recall that it is nature (not man) who chooses the rules that decide on which species will be the next dodo. 

 Epicentre (please relay this memo to DR Yunus) 

I have a memo from the head of a leading global communications agency headquartered in New York asking if Dr Yunus would be interested in working directly with him . The emerging idea to invite his global clients to celebrate the leadership example set by Dr Yunus by each planting an end poverty project in one of the countries that their company is globally present. There are already one or two cases of this being done within his roster of leading global clients - an example I know about planting systems for the poorest in Guatemala. Moreover there is already a multinational team of staff within the agency highly motivated by such purposeful communications efforts 

It is expected that if the group of CEOs can work directly with Dr Yunus at least 10 and probably nearer 20 of this agency's global clients would join in. This is because this agency more than any other has evolved around the idea that the way you brand tells a lot about a leader's own values. Its fieldbook of practicing this is co-written by one of the most admired academic of worldwide branding as a strategic change opportunity. These CEOs are used to working on combined projects provided they are directly system designed by the head of this agency 

Global communications agencies are a small world that I have worked with for 30 years now. Once one offers the leaders of its most impactful clients something young people applaud (and this is seen to be the next wave as Paris on Feb4 will help do) it is not too difficult to chat up others to follow - if you know the people order to diffuse an idea whose time has come. Please tell me if Dr Yunus is interested in this approach and if so how you would like to set up a meeting. As you know 3 generations of my family normanmacrae.com chrismacrae.com isabellawm.com have worked on the economics of media, microeconomics models and the system dynamics of where to plant entrepreneurial revolution. We strongly commend the urgency of this leadership approach so that Mad Avenue and Walled Street move forward into a 21st C Americans and youth in big capitals can be proud of. GOODWILL CULTURES THAT MULTIPLY VALUE & EXPONENTIAL RISING

As the triple issue of the journal of marketing management I guest edited in 1999 shows what sustainably energizes brand leadership communication and heroically purposeful innovation round a worldwide organisational system is communal pride and individual passion (self-esteem as your Centre in Paris aptly calls it)

cheers chris macrae washington dc 301 881 1655 http://www.worldclassbrands.tv/

PREVIOUSLY Nov 2009 Breaking News - at launch of Global Grameen 1, WCBN associates commit to Nobel Laureate Dr Yunus to find 9 global brand ceos who want to join his global grameen social business club aimed at global branding the world's number 1 partnerships and benchmarking knowledge centres for sustainability

Munich Speech

Similarly we have been discussing with Volkswagen, giving them ideas about social business, and they are seriously considering producing a new kind of vehicle for Bangladesh and other countries where the road conditions are extremely poor. In addition, we want to create a green engine for the vehicle, which will be a multi-purpose engine, so that it’s not just used for carrying agricultural produce. The idea is that the engine will never sit around doing nothing. You simply pick it up and it becomes an engine for irrigation, or for producing electricity, or for powering a boat. So it has multiple uses and we make it affordable for the ordinary people.

Breaking News Fall 09: Autostadt Wolfsburg stages first Global Grameen meeting 7 November

Munich Speech

Then we approached another company – Adidas – with a proposal, which they were very happy to consider. The objective that we have defined is that nobody in the world should remain barefooted. To begin with, Adidas would supply its brand name and produce shoes for less than one dollar, so that everybody can afford them. Adidas would recover its cost and at the same time people would get shoes.

Munich Speech

In the meantime, another company has approached us: Veolia – again a French company, a water company. Together we created Grameen-Veolia Water Company in Bangladesh. Bangladesh has a serious drinking water problem. In most parts of the country, the water is highly contaminated by arsenic. Since there is no other water, more than 50 million people in Bangladesh out of 150 million drink arsenic-contaminated water. Children drink poison every day. What we did through this company was set up a small water treatment plant in a cluster of villages to produce very high quality water for the villages and sell it at a very cheap price. People pay the price and get pure water, the company recovers the cost. The price we have fixed for this water is one penny for four liters so that everybody can afford it

Munich Speech
Basically a social business is a non-loss, non-dividend company with a social objective. I have set up many of these businesses, but some of the recent ones have become more high profile. One is a joint venture with a major company, Danone of France. Together we created Grameen-Danone Company in Bangladesh as a social business. What does it do? It produces yoghurt. Danone is a big yoghurt company that makes delicious yoghurt. We wanted to use that for a social purpose. What is the purpose? There are millions of children in Bangladesh who are malnourished. So we created this company to produce yoghurt. We take all the micronutrients that are missing in the children and put them in the yoghurt: vitamins, iron, zinc, iodine, everything they need, and we make the yoghurt very delicious and very cheap, and sell it to poor families at a price they can afford. And if a child eats two cups of yoghurt a week and continues to do so for eight or nine months, what was formerly a young life wasting away for lack of nutrition becomes a healthy, robust, playful child. This is the purpose both Danone and Grameen have agreed on. We also agreed that we will never take any dividend out of this company except to repay whatever investment we have made. We can take back the investment, but not a penny more, because this is a social-cause-driven company.
In a profit-making company, you ask the CEO: How much money will you make this year? In a social business like this, you ask the CEO: How many children will you save from malnutrition this year? And next year, how many are you planning to save? Because these are the corporate profits, defined in terms of the company's social objective.

below is a general presentation on world's greatest invention one-pager - each section corresponds to a row of slides as Dr Yunus wants to form a club of 100 global brand CEOs who want to benchmark this invention, I make quite a lot of customised presentations to global branders - if this is your sort of interest why not contact me ast chris.macrae @yahoo.co.uk or my washingtin dc tel 301 881 1655 Bad news of globalisation system crisis is that its a double whammy of 1) media crisis where neither speech nor markets are free; 2) metrics crisis where as we saw from wall street 2008 the biggest rewards go to those who make systems least sustainable.The good news is one country -Bangladesh at its birth over a third of a century ago-  came up with the world's greatest invention : Yes WE Can communally intervene in any globalisation crisis! What is the invention? It's a system design methodology (propagated by Nobel Lauraete Muhammad Yunus as social business) for designing a transformation of any global system that is exponentially crashing down. It can bend the curve to be sustainable exponentially up in every community that replicates a particular social business system design's franchise.   Social business solutions can be mapped to provide specific life critical solutions - of which ending poverty is integral to every human and communal sustainability crisis. The reason this invention seems a mystery, apart from the censorship crisis of media and the rewards crisis of measurement, is that systems maps are humanity's least commonly developed educational curricula just at a time when networks = system**n needed system mapping to be the 5th R. As Gandhi & Einstein noted continuously in their collaborative support to end the crushing English colonisation of India which my maternal grandad as head judge in Mumbai took 25 years to be converted by - to compound whole truth, system mapping is as important as any other kind of literacy. This becomes sustainability critical wherever top people make decisions which scale globally and compound exponentially over time. How do social action networks share the world's greatest invention? Why not debate it in collaboration forum, map it wherever a social business model intervention needs to be replicated or designed, and encourage the mother of all benchmarking movements among such leaders of transparent system governance as vice chancellors of universities, Global Brand CEOs, G8 leaders and top politicians/professionals, the world's best endowed foundations and philanthropists. Questions welcome chris.macrae @yahoo.co.uk - Washington DC Yes WE Can bureau 301 881 1655 PS 9-12 year olds love exploring the world's greatest invention http://yunusyouth.com/ - why do we find it harder when we get older?

A Strange Leadership Quest- The First 20 Years Globalisation of media is sufficient of a system change that it can only spin one of 2 opposite outcomes: to sustain or end the world I have been searching for a global brand panel of ceos who want to benchmark how to sustain the world with brand valuation for 20 years. The search started when I briefed The Economist on their survey: The Year of The Brand. It was nicely written except the journalist involved hasn't actioned his own words about brand trust needing to be valued systemically far more humanly - at every quarter - than brand perception. At the same time the first in my genre of world class brands books was published. It looked back at media's hidden agendas as discovered in 15 years of brand research in 40 countries and a multi-miilions of hours of interviewing databank on customer and societal responses to brands made possible by express software and MIT market models. Looking forward to the 2010s: I am extremely hopeful that fans of Nobel Laureate Muhammad Yunus will gravitate at least 100 global brand ceos valuing sustainability over the next 7 years with the fantastic first celebrations in nov 2009 recalling the 20th fall of the wall http://www.grameencl.com  as well as announcing the world's greatest invention to brand leaders.   But my hope depends on you too. Even if you dont know a global brand ceo, you customise many such corporations. Ask their co-workers who serve you at every chance you can - whether their company consciously and communally uses media to sustain humanity. Because if a system like global media is NOT measurably goverened around such a purpose , the reality is the system will spin the opposite way through time- and I dont know many people - even in wall street or St James - who consciously want to end their future generations. That's the issue at stake while we have no exponentially true way of valuing brand sustainability- only the world's greatest invention will cure that!

Brand Brainstorming -chris.macrae@yahoo.co.uk

I love brand brainstorming when the group involved first have the same brand chartering curiosity in their head with agreed do now action projects

Unfortunately the extraordinary breakthroughs this has achieved are too confidential to the client for me to want to sjhow them on the internet

However I have hosted some brainstorms with world leading communications professonals on ways to communicate and connect they had never seen before but wanted to try

occasion 1 enterprise ig, wpp 1998

how do we live brand activities of different departments in an organisation so that everyone celbrates those departments that have the least silos and glue the brand's service reality to its perceived promise

Analogies to the networking role of "activity special correspondents":

tt: living wall where directors of companies answer post-it questions >- cm: looking forward to seeing what activity becomes important enough to launch this in our company... (this idea was later followed up by one leading design agency who put their living wall in reception!)

cm: editing & newspaper journalist network; benchmarking destinations presented like a travel holiday catalogue with pages on paradise destinations, ie activities (rated best by different value ideals), & grouped in process sections so that client sponsors can browse between home processes (they already feel expert at) and away processes (they need to explore and become exotically attracted to)

electronic communities of practice (you are interacting with one which is growing as/because you read this!)

n: parliament's resolution of complex interests, provides an interesting metaphor for why some organisational politics is good for brand learning (when it simplifies and resolves constructive tensions), but most is bad (especially when its covered up from its people on whom the integrity of brand actions depends)

Imagine this- in celebration of the 20th anniversary of the fall of the wall, 100 global brand leaders meet to plan the end of poverty and the renewal of millennium goals with Grameen's Nobel Laurate Dr Yunus and friends from G8 leaders to european royalty cheering on - some in person, some virtually
are you a global brand elade who wants to be there
more details chris macrae yes we can bureau Dc 301 881 1655

benchmarking subclubs include:
sustainability
workforce
extreme innovation partnerships
global celebration events of humanity's greatest achievements as well sports
...

This is one of the exhibits being prepared for our 18 month research report for dr yunus being presented during last week of june in dhaka- if you have -or know of anyone to discuss - extra items to put in the test please do

Youth /entrepreneuriq test on what a nation’s most trusted microcredits can do

 Most trusted microcredits become a nation’s/people’s most trusted brand –what opportunities can be made of this 

1 Test What industry sectors in that nation are most productively and sustainably owned by bottom-up – eg for Bangladesh these include banking, mobile telecoms, green energy, nursing, teaching, poultry, livestock, silk farming and lead fashion brand are

 

2 Test out with future capitalism partners what global market sector responsibility benchmarks can best be set by partnerships of the world’s most resourced organizations and microcredits as grassroots networks serving life-critical needs – eg about 30 benchmarks have merged from first 2 years of global future capitalism benchmarking club

 

3 Open source ten times more economical social business designs across nations’ deepest microcredits

 

4 Enable university clubs to experiment with projects – either directly on location, or through entrepreneur competitions (eg MIT), or by 2^nd generation “productkivas” –offer students leadership quest opportunities to themselves be income generating while building leaders understanding that youth value future capitalism media stages more than advertising spots

 

5 Clarify how many different deepest segments of microcredit a particular nation needs –understanding how lead segmentation depends on nature of original cause of compound poverty or compound loss of sustainability at community levels

 

6 Keep pushing creative lab barriers on what collaboration innovations improve the peoples lot as out networking age’s exponential investment up transform beyond post-industrial  and look to end history’s greatest divides with particular reference to 7 microeconomics and microsummit wonders :

Microcredit

MicoHealth

MicroEducation

MicroEnergy

Micromedia

MicrosSMBA

Microgov

chris macrae http://worldclassbrands.tv  usa tel 301 881 1655

Help SWOT media since the BBC began tv broadcasting in 1936
resources: 1984 net future

.	.
.
Weaknesses each new media licensed by government as free lunch (stealth tax): ie government becomes popular short-term with electorate whilst licensing out commons to (addiction of future generation? degree to which image-making takes over from truth; way in which life critical news becomes as expensive to propagarte as launching new flavour of soda; neurotic hooks of excess con sumtion and ways that sectors like banking deviate from investing in community prodictivity to trapping in debt of excess consumption; ways in which most media executions indude attentiondeficit order or separate soundbite info from whole picture systemic understanding) to commercial operators	Threats: compound expoential impacts (ie sustainability risks) never foreseen let alone debated democratically ahead of time

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www.macrae.tv washington dc bureau 301 881 1655  (gmail address macrae.tv) -1 Jan 2009 - an article by Norman Macrae - to celebrate a new year and good wishes to Yes We Can Administrations

 

How to Avert A Great Depression Through the Hungry 2010s? 

Answer, By Making All Banking Very Much Cheaper, By Norman Macrae

As a teenager, Norman began studying economics in (today’s) Bangladesh whilst waiting to navigate RAF airplanes in world war 2. His father-in-law was mentored for a quarter of a century by Gandhi, one Bar of London Barrister to another, on how to end Raj Imperialism. He went on to write over 2000 editorials from the microeconomics perspective of Free Markets & Entrepreneurial Revolution  for The Economist, and in 1984 mapped what  alternative futures micro versus macro economic worlds of the first networking generation will spin www.normanmacrae.com/netfuture.html www.erworld.tv  -contact  info@worldcitizen.tv Washington DC bureau 301 881 1655 

If banks in rich democracies had been truly competitive institutions, at least one of them somewhere would have seized the main opportunity created by the computer. This main opportunity was to make all deposit-banking vastly cheaper than ever before. By this cheapening it should make such banking hugely more profitable. Then further competition would search for the cheapest ways to guide all the world’s saving into the most profitable (or otherwise most desirable) forms of capital investment, thus enriching all mankind.

 

Instead, during 2008 the total losses of banks in rich democracies – in North America, West Europe and Japan – soared into trillions of dollars. Fearful for their solvency, these banks virtually stopped lending. The issuance of corporate bonds, commercial paper, and many other financial products largely ceased. Hedge and insurance firms also crashed. Mankind is thus threatened in the 2010s with its longest great depression since the hungry 1930s.

 

Why? The strange answer seems to be that other happy consequences of modern technology promised to make this cheapening even faster. Call centres in Bangalore vastly undercut the middle class salaries of Midland bank clerk who until the 1950s expensively answered clients’ questions in their branches in the City of London. Cheap mobile phones kept village ladies in once miserable Bangladesh as fully in touch with market prices as is the chief research officer of the First National Bank of Somewhere in California. His weekly salary is still 1000 times greater than the previous annual earnings of that village lady. The cost-effective way of running the old Midland or First National then seemed to be to cut its total salary cost by something like 99%. This did not please Western welfare governments, or the decent chief executives of the old Midland or First National bank.

 

Awaiting the sensation of a short sharp shock From a cheap and chippy chopper on a big black block  – WS Gilbert in The Mikado - why it is uncomfortable to work in an industry which needs 99% redundancies.

 

Western welfare governments have long preferred to run their banks in high cost cartels, and even invented reasons why this seems to be moral.  Their deposit-banks have usually kept in cash only 10% of the total amount deposited with them. If 11% of depositors suddenly feared that their banks might go bust, this could accelerate a run that would send them bust indeed. Governments therefore thought that depositors would be less fearful if they were assured that the banks were officially and tightly regulated. Actually, this mainly meant that the banks had to hire ever more expensive lawyers so as to escape any crippling consequences from this regulation. The attached quote shows that Samuel Pepys understood this fact of life in his Diaries of July 21, 1662.

 

I see it is impossible for the King to have things done so cheaply as do other men  – Samuel Pepys on discovering an important commercial fact of life in his Diary, 21 July, 1662

 

The decent bosses of the deposit banks felt that the best way of avoiding sacking nine tenths of their staffs was by competing with a very different sort of financing called merchant banking whose earnings and bonuses were far more generous than those given to their own staff. These merchant banks were of peculiarly differing pedigree. In London, it was assumed that they could best be run by families like Barings who had done the job for over 200 years. In the 1990s, Barings went totally bust because one of its hired traders bet much of its money on a hunch that a bad earthquake in Japan meant that the shares of Japanese banks and insurance companies would become more profitable. In Zurich, merchant banks felt it most moral to keep the accounts of their depositors totally secret, especially if these accounts were being used to defraud their own countries’ tax authorities. In 2008 those secretive banks were then defrauded. In Wall Street, Goldman Sachs and Lehman Bros bid up their annual bonuses to millions of dollars for each partner. In 2008 even Goldman Sachs made a loss and Lehman Bros went bust.

 

A former chairman of the Federal Reserve argues that “fearful investors clearly require a far larger capital cushion to lend unsecured to any financial intermediary now”. He therefore thinks that taxpayers money should be ladled into them to make those investors less fearful. This seems far more likely to make depositors intermittently more terrified and cause any depression into the 2010s to linger on and on.

 

In the 1930s, the chief economic adviser to the government of Siam was called Prince Damrong. I try always to remember it – quote from former director of International Monetary Fund.

 

One of the few big banks to make a profit in 2008 was the Grameen Bank (which means Village Bank) in that once basket-case country called Bangladesh. The sole staff in a branch serving several villages was once a woman student. It is now more usually someone who has learnt to use the computer in the right way.

 

The rest of this report will examine how this marvellously cost-cutting operation works. Perhaps the most relevant and terrifying analogy is to commercial airlines. In 1945, there were only a tiny number of passenger airmiles flown on them. In each successive year these increased hugely and in this slumptime 2009 there will be billions of passenger airmiles flown. In the late 1940s most governments therefore created national airlines and were confident they would flourish in this boom industry, with official regulation assuring they would be safe. Instead all proceeded to lose money, and later privatised but large airlines also did. The present trend is to cost cutting airlines like Ryan Air.

 

The same will happen to banks. Large banks mislending to the rich have run into losses that have created the slump. Politicians, thinking they are saving the world, are mislending huge sums to these mislenders and will eventually make the slump worst.

 

How to create cost-cutting banks? Begin the story with the crosshead below, peculiar as it may seem.

  

START IN A STARVING VILLAGE

The Nobel peace prize for 2006 was controversially awarded, in Oslo, to a “banker for the poor” in usually unfashionable Bangladesh. Since the microcredit system pioneered by this Dr Muhammad Yunus really has lifted record millions of Bangladeshi women from the world’s direst poverty, some of the world’s toughest tycoons have thrilled to his stated aim to “harness the powers of the free market to solve the problems of poverty”.

 

To his fans’ delight and astonishment, he is achieving exactly that. In the past quarter of a century, his Grameen Bank has lent (without collateral or lawyers) increasing billions of dollars to millions of poor women in the previously starving villages of Bangladesh, and got an extraordinary 99% repayment back. His often illiterate customers have started millions of successful small businesses in unimagined fields like mobile telephone ladies and saleswomen of the world’s cheapest yogurt. All these successes have been won by keeping costs incredibly low. A banking operation that would cost Goldman Sachs $100 in New York or London would cost Grameen in Bangladesh well under 100 cents.

 

This is a huge development in human history. Money can now be directly channelled into productive use by the world’s poorest people, while unsuccessful lending to the rich has caused a world slump. How do we switch custom to cost-cutting banks?

 

During Bangladeshi’s terrible famine year of 1974, Dr Yunus ( who had won his doctorate in economics in a free market American university, which most founders of banks have not done)  came back to his 1940 birthplace of Chittagong, as professor of economics at the university there. He started lecturing on his republic’s 5 year plan, which like most 5 year plans was economic nonsense. In search of reality he took a field party of his students to one of the nearby famine threatened villages. His group analysed that all 42 of the village’s small businesses (such as tiny farm plots and market stalls) were  indeed going bust unless they could borrow a tiny total $27 on reasonable terms.

 

The first thought was to give the $27 as charity. But Yunus lectured that a social business dollar, which had to be paid back after careful use in an income generating activity was much more effective than a charity dollar, which might be used only once and frittered away.  The careful use of loans in very small quantities, says Yunus “means that you bring in a business model, you become concerned about the costs, the revenue, how to bring more efficiency, new technology, how to redesign, every year you review the whole thing. Charity doesn’t bring that whole package”.

 

Mercifully, all those first 42 tiny loans were fully repaid, and lent back. After 9 years of further experiments, Yunus in 1983 founded his Grameen Bank. Its priority was to make loans that were desperately needed by those of the poor that did repay them. Indeed, he argues that “access to credit is a human right so long as that credit is repaid”. This is the reverse of the usual banking priority, which is first (and in credit crunches only) to make the safest loans those to the rich that can provide collateral.

 

In these last 25 years, Grameen has provided increasing $billions of loans to poor people with that astonishing 99% repayment rate. In 2006, it had 7 million borrowing customers, 97% of them women, in 140,000 villages of Bangladesh. Microcredit had by then reached 80% of Bangladesh’s poorest rural families. Over half of  Grameen’s own borrowers had successful small businesses. The women borrowers predominated because they usually are the poorest people in rural Islam and proved best in paying back.

 

When a Grameen bank manager goes to a new village, he has entrepreneurially to seek for poor but viable borrowers. He earns a star if he achieves 100% repayment of loans, and other stars if his customers are fulfilling most of the 16 guarantees that all customers are asked to pledge, ranging from intensive vegetable growing, through sending all their children to school, to renouncing dowries. A branch with no stars would be in danger of closing, so borrowers rally round with suggestions, such as which unreliable repayers to exclude. Borrowers from the bank who do repay are called owners of the bank and receive incentives such as opportunities for insurance, and for winning university scholarships for their children.

 

An early income generator was the profession of telephone ladies. They borrowed enough to buy a cheap mobile phone from a Grameen subsidiary. They draw fees for phoning to see if more profitable prices for crops are available in a neighbouring village, and from anybody who wants to hire the phone to contact the outside world. This is a job that could only become important in a microcredit setting. The owner of a mobile phone in richer suburbia would not find many customers to hire her set.

 

One special desire of Yunus  was to improve the nutrition of poor children in Bangladesh , and he formed a social business with the largest French food multinational. This Grameen-Danone test marketed to find what sorts of fortified yogurt Bangladeshi children would like.  Although Danone at first wanted large plants with refrigerated systems, Grameen won the debate to make them small plants which bought local milk. It hired very cheap local distributors who knew which families had children who might buy the yogurt at a few cents a cup. To keep the price that low, Danone had to agree not to pay any dividend from the sales of the yogurt in Bangladesh. but its $1 million investment remains returnable and it has learnt a lot about sales of a new product in poor countries.

 

A French water company is forming a similar social business with Grameen to remove arsenic from Bangladesh’s rural water supply. Some American computer tycoons (including Bill Gates) may help to find the best way to establish computer centres in remote villages. The telephone ladies will then face competition, but constant competition in new technology is one name of this game.

 

Nobody is suggesting that Goldman Sachs, when it recovers, should operate precisely in Yunus’ mode. But some competition in sharply cutting costs in most banks will have to be part of the world’s new banking system.

 

Microcredit will play a part in solving some problems that statesmen won’t yet believe. http://bankabillion.org

 

Microcredit could also best move poor Afghans off growing 93% of the world’s present supplies of heroin, while international aid to understandably corrupt governments in Kabul do the opposite. At present international drug barons buy the heroin from Afghan farmers at a few pence per gram, then sell that gram in Mayfair or East Glasgow for around £60 per gram. This is not a distribution system with the needed cheapness and efficiency at which microcredit excels. A Yunus-type of bank might set Afghans, like Bangladeshi, more profitably at selling yogurt instead. Before Helemand province specialised in heroin its main product was fruit; microcredit could lure it back to that. Dive-bombing Taliban, who guard the poppy fields has been a vulgar commercial mistake.

 

Yunus’ winning ways with Islamic women can be turned into exciting community exponentials in ending poverty in Africa. But at present Africa is held back from banking for the poor because so many of its children are dying with malaria and its adults with aids.

 

A large number of US congressmen of both parties are asking the World Bank for a flexible grant facility of $200 million per year to build the capacity to find what systems of microcredit work where. This could best be combined with Dr Yunus’ proposal that an investigator of poverty should study in which districts poverty is falling and in which it is increasing. The banks or other bodies working in the successful areas should then be copied in the unsuccessful ones. When banking in the rich world recovers, a similar investigator might well be asked to report on what new systems of lending are working there too, and to discontinue the sort of banking whose losses have landed us in world slump.

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Some References From 25+ Years Ago

 

Will NetFutures empower Yes We Can Economics http://www.normanmacrae.com/netfuture.html

 EF Scumacher : The heart of the matter , as I see it, is the stark fact that world poverty is primarily a problem of two million villages, and thus a problem of 2 billion villagers. The solution cannot be found in the cities. Unless the hinterland can be made tolerable, the problem of world poverty is intolerable, and inevitably will get worse