Page 41 - Social Enterprise A New Business Paradigm for Thailand

Even before receiving this global honor, the bank had already gained international acclaim. Yunus
expanded on his vision through four influential books: Banker to the Poor: Micro-Lending and the

Battle Against World Poverty (1999), Building Social Business (2010), Creating a World Without
Poverty (2007), and A World of Three Zeros (2017).

Much like social entrepreneurship theory, Yunus’ss approach begins with a critique of capitalism
and market systems. He views them as key drivers of inequality and environmental harm. In
response, he proposes that social entrepreneurs act as change agents, building businesses that
prioritize justice, sustainability, and equity.

Yunus defines social business through seven guiding principles:

1. The business must pursue a primary social objective. Its first concern should be: What

problem does this business aim to solve? Not: Which product offers the highest profit?
2. It must be financially and economically self-sustaining. Even when operating in the same
sector as conventional companies, a social business must be able to stand on its own.
3. Investors are only entitled to recover their initial investment. They receive no dividends or
interest.
4. All profits beyond the return of original capital must be reinvested in the business to foster
growth and improvement.
5. The business must operate sustainably and in an environmentally conscious manner.
6. Employees should receive fair wages and work in decent conditions.

7. All stakeholders should find joy and purpose in their contributions to the business.

Yunus categorizes social businesses into two main types:

• The first type includes companies established solely for a social mission. These organizations
operate on a non-loss, non-dividend model, with all profits reinvested for continued social
impact. Even in partnerships with conventional businesses, investors may recoup their
principal but receive no dividends.
• The second type consists of businesses that pay dividends, but only to disadvantaged owners,

such as low-income individuals. Grameen Bank is a prime example, with borrowers owning
shares and receiving a modest profit share (approximately 20–30%).

Yunus firmly opposes the integration of profit-maximization or dividend incentives into the
definition of social business. He offers three core arguments:

1. It is unethical to profit from the misfortunes of the poor.
2. When forced to choose between profit and impact, most businesses will prioritize profit. For
example, food banks that rely on donations can be undermined when surplus food is diverted
to commercial enterprises that see an opportunity for profit instead.

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