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Nobel winner Yunus wants more social business in China

(Xinhua) Updated: 2015-04-17 10:11

BRUSSELS - China could balance its economic development through fostering rural areas' potential by introducing social business and Internet technology, Nobel Prize winner Muhammad Yunus said.

"In China, there is a problem of youth migration from rural areas to urban areas. The pull factor of the attractive income draws the workers from rural areas to urban areas. As a result, the rural economy is suffering from a shortage of workers," Yunus told Xinhua in an exclusive interview.

Yunus is known as the father of microcredit, having won the prestigious Nobel Prize in 2006 for pioneering the concept of microfinance wherein people too poor to be granted loans at a traditional bank have access to capital.

Giving suggestions to China and emerging market countries, Yunus explained it was necessary to create many kinds of enterprises within rural areas, bringing franchising, outsourcing from the urban areas to rural ones.

Yunus suggested policy-makers set up social business funds in rural areas so people can have a decent salary there. He said this financial approach -- setting up social business financial institutions -- was the best methodology to support local economic development.

"We must make sure that these institutions are available so people can turn around and start their own creative power," Yunus said.

Yunus called social business financial institutions in rural areas the best methodology to support local economic development.

Yunus noted that attention has to be given to the financial systems and also designing social businesses in the rural areas.

"We need to re-design the financial service completely. There is a large number, almost half of the population in the entire world, that are not reached by financial institutions. We need to address them. Rural areas deserve special attention because most people in emerging countries live in rural areas."

He emphasized that it was essential financial services were designed in such a way that people's problems are solved, and likewise that these services should not become a big money-making enterprise for rich people.

In Yunus' view, investors or owners can gradually recoup the money invested in a social business, but cannot take any dividend beyond that point. The purpose of the investment is purely to achieve one or more social objectives through the operation of the company, personal gain should not be the investor's aim.

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