Muhammad Yunus: Building Social Business Ventures (preview)

Muhammad Yunus, winner of the Development Gateway Prize and the Nobel Prize, talks about the institutions needed to promote social business enterprises, such as the Grameen Bank (a microlender) and other enterprises he has created. He suggests that there should be markets for investment and lending to such enterprises, since existing financial enterprises have not evolved for their support.

Again, Yunus has a very interesting idea. Wall Street investors in my lifetime have expanded their view to consider not only profits but risks and have developed portfolio investment strategies that increase profit for a specified level of risk by selecting investments with uncorrelated (or even better, negatively correlated) risks.

I suggest that we need simple indices for social businesses to be added to profit and risk. For example, how about an index of social benefit per unit investment, and an index of the risk involved in achieving those social benefits.