Collateral free loans for the poor : from «micro-credit» and «financial inclusion» to «social business»

الملخص EN

This paper tackles the changes in the conceptual framework and practice of grass root credit reliant on views of Mohammed Yunus, the founder of Grameen bank and the Nobel Peace Prize winner in 2006.

The paper will also tackle the concept and the major outcomes of “financial inclusion” as a more elaborated and advanced concept, and see the stance of “social business” views in accordance with Grameen experience & in comparison with the Sudanese interest free microfinance models.

The microcredit is a way to find finance avenues for the poor, while the financial inclusion has extended its domain to include other financial services.

Mohamed Yunus’ views extended the social role of microcredit via a mechanism for the poor to be the owners of the microfinance services providers themselves and the investment therein “the social business”.

Mohammed Yunus’ “social business” concept is to harness financial resources in sustainable and profitable investments to address social problems without distribution of profits to the shareholders.

This investment isn’t for individual profit, but managed on a commercial basis and creates profits that reinvested to ensure the expansion and sustainability, and investors have the only right on their capital.

We think that these ideas can be categorized as a hybrid between the charity concepts and the personal profitseeking investment.

The whole idea is to mesh these two concepts in one view to reach an investment that creates “happiness” for their providers, and at the same time solve the problems of the capitalist system, which is merely based on profit motives away from solving the society’s problems.