A Table of Contents is here on http://bit.ly/h8rmxd.

It has been nominated for the prestigious Montaigne Medal and received the endorsement from many influential people, including Dr.Yunus.

Publisher description
A comprehensive look at the concept of micro-financing
Micro-financing is considered one of the most effective strategies in the fight against global poverty. It can be implemented on the massive scale necessary to respond to the urgent needs of the world’s poorest. And now, in Small Loans, Big Changes, author Alex Counts looks at the lives of micro-lending borrowers from the Grameen Foundation in Bangladesh and Chicago. All of the borrowers profiled here are women of little-to-no means, each struggling to gain financial independence. Readers will discover how, in Bangladesh, these women face off against very poor living conditions and the prejudice of men, while in Chicago, they must overcome crime and other hurdles that come with life in the inner city. Written in a straightforward and accessible style, Small Loans, Big Changes reveals how Muhammad Yunus and his concept of micro-financing has helped those living in poverty achieve real financial independence.
Alex Counts (Washington, DC) is President and CEO of Grameen Foundation, a nonprofit, Washington, D.C.-based organization that has grown from modest beginnings in 1997 to become a global network of 52 micro-finance partners in 22 countries. He trained to be a catalyst for change under Dr. Muhammad Yunus, the founder and Managing Director of the Grameen Bank and corecipient of the 2006 Nobel Peace Prize.

Table of Contents

Foreword.
Acknowledgments.
Introduction to the 2008 Edition.
Introduction to the First Edition.
Chapter 1. Muhammad Yunus -From Vanderbilt To Chittagong.
Chapter 2. The Birth Of The Grameen Bank.
Chapter 3. Zianpur Bazaar.
Chapter 4. Las Papillons.
Chapter 5. Amena Begum’s Dream.
Chapter 6. Omiyale Dupart.
Chapter 7. The Haldar Para.
Chapter 8. The Maxwell Street Market.
Chapter 9. Krishna Das Bala.
Chapter 10. The Hip Hop Shop.
Chapter 11. Dry Money in a Monsoon.
Chapter 12. The Black on Black Love Festival.
Chapter 13. The Sixteen Decisions.
Chapter 14. âœWe’re Here For Youâ .
Epilogue.
Appendix A.
Notes.
About the Author.
Index.

Alex Counts bio

Alex Counts is President and CEO of the Grameen Foundation, a nonprofit, Washington, D.C.-based organization that has grown from modest beginnings in 1997 to become a global network of forty-six microfinance partners in twenty-four countries. Under his leadership, the Grameen Foundation impacts an estimated eighteen million lives in Asia, Africa, the Americas, and the Arab World. Counts trained to be a catalyst for change under Dr. Muhammad Yunus, the founder and Managing Director of the Grameen Bank and corecipient of the 2006 Nobel Peace Prize.

From Poverty News Blog: Reducing Poverty On Credit

from All Africa

New Vision (Kampala)

By Gawaya Tegulle
Kampala

Title: Credit and Reduction of Poverty in Uganda: Structural Adjustment Reforms in Context

Author: William Muhumuza

Publishers: Fountain Publishers

WHILE the reduction of poverty has become a major development policy objective worldwide, the debate continues as to the most effective way to actually reduce poverty.

The belief is that credit programmes are important in speeding up wealth creation among the poor and improving their welfare, and to this end, billions of dollars have flowed from the west into Sub-Saharan Africa, where the majority of the world’s poor live.

Credit and Reduction of Poverty in Uganda focuses on Uganda, where the NRM Government fully embraced credit as one of the policy strategies to reduce poverty – under the auspices of the IMF and World Bank.

This book explains how this has been done and raises questions on its effectiveness, before offering alternatives.

It is an insight into the interplay between political decisions and economic policies and processes in difficult contexts.

Though the book is about Uganda, it is also a microcosm of the broader Sub-Saharan Africa and its relation to the IMF and World Bank.

These are some of the chosen parts from the conversation in London on 15th February (MY = Muhammad Yunus, LB= Liam Black):

MY

For a profit maximising company, the bottom line is how much money you make. But when you run a social business, it’s about impact. Ours was about impact on malnutrition in children. But you need to have measurement and we needed to understand the measurement of nutrition. If you have 100 units and you reduce it by one unit, it’s still a reduction. Measuring your success is different between a social business and other businesses. It is purpose driven and objective driven, not money driven. Measurement is a process and you have to build up to these things, but it can be done. If there’s a problem, it has to be measured. If we can’t measure it, we can’t do anything about it.

LB

I’m a great believer in social reporting and accounting and we (Fifteen) have just published our report. I have found a lot of people in the social enterprise sector reluctant to engage with reports and provide them. It’s where the cynicism from capitalism comes from.

MY

This leads us to talk about the social stock market. It has to be measured to gradually define the improvement.<

…..
MY

The point I make is it’s everybody’s heart, not just special people. Even the most greedy businessmen who make every pound for themselves feel that way. But there is only one road and the only thing we do is make money or charity. The companies making money are the big lorries speeding up the road and overtaking the small farmers pulling their carts. Now that I have built a new road, people say to me ‘here I am’. Social business will come with an unexpected amount of enthusiasm. People like doing things for other people and they want to do it, so why deprive them of that enjoyment. Life is about enjoyment and I am depending on that. These who take the first step are the ones at the front line.<

….
MY

Yes, there will be competition, but if Nestle is competing with Danone, and they are on the same side of the road, it is fine. In a social business we are purpose driven, not money driven. If I am trying to bring water to these people and they are trying to bring water to these people, then we are friends. We reach more people and we can provide even cheaper water.

LB

But what if we have a payroll to meet every month? I have seen it in the social businesses I have been involved in.

MY

What is the competition? If I am a charity and I go to a donor and don’t get the money, I close the shop, but in social business, you never close the shop. In the charity world, I go to the donor, spend the money and then go back to the donor. In social business, the money is recycled. There are thousands of people that need help. Why should microcredit compete if we are not interested in profit?

LB

But we need the profit to innovate, don’t we?

MY

If we are recovering the cost, we can repeat endlessly. This is a great year because we have reached another 20,000 people. They are safe and they don’t have to drink nasty water. On the financial side, we made a five per cent surplus, but the owners can’t take dividends, so no one can take that away.

LB

Innovation is driven by making money. Do you think the good heart of a chief executive of the social business is enough to drive innovation and create good products and services?

MY

My assumption is making profit is a driving force to push us into lots of things, like expansion. Similarly, doing good is a strong driving force. Can I make it easier? Do people have to walk a mile to get their water? Could I bring it closer than half a mile? Can I do it near their home?
<

….
LB

Your book got a hostile review in the Financial Times. The reviewer said that funding a social enterprise proposition relies on people giving up a return on their money, on the kindness of strangers. If the heart of the Grameen proposition is that a woman needs money to unleash her entrepreneurial drive and make money for herself, then it’s proposing a social business model that retains the profit. Isn’t that a contradiction?

MY

It’s different profit. It’s about her profit. She is making a profit to lift herself out of poverty and make a better life for herself and her family. When I brought this yoghurt to the children I didn’t say ‘we must get your parents to pay for it’. I said ‘this is a delicious yoghurt. Are you going to pay for it?’. It’s our conspiracy that whether they enjoy this lovely yoghurt or not, I give them some medicine. I didn’t create the Grameen Bank or Grameen Danone Foods to make money, I did it for the good of others. But why does it work? Is it because Danone wants to make money out of it? No, there’s no profit to be made.

LB

Well, I’m talking to the master here.

If there is a recession, what impact will it have on this?

MY

Some adjustment will have to take place. If we are looking for someone who makes a lot of money, they will be concerned about their money. They might wait until the next year to invest in something. Everyone will be cautious, but that will be everywhere in charity, business and social business. It will not mean everything closes down. The businessmen might say ‘I could lose millions on the stock market, so I might as well put my money in a social business’. At least they get back what they put in.

LB

It’s dependent on someone with enough money waiting to invest in social business. Will it be that that part of social business will always be dependent on capitalism?

MY

What’s wrong with that? This is supposed to be the means to an end. The real picture is here we make money and this is our money to do good for the world. That will stay in tact. People say ‘what am I going to do with these millions?’. Look at Bill Gates.
<

….
MY

As long as you are a profit maximising business, your thinking process is about how to make money. Imagine you came to a business where you don’t have to make money, you just do good. Your thinking changes completely. A lot of things become relevant and irrelevant. If you are not making money, the packaging becomes irrelevant for example. You do not need to promote it. You use that money saved. You just think about delivering the real thing. People think that if they are not making money, they will not be interested in investing. It’s a common question I am asked. But they are not giving me money, they get it back.
<

….
MY

If I am poor and I lived here, then wouldn’t a social business help me? In America, what about health insurance, which is a good sector to start with. We understand what it is, not being covered by health insurance and living in the US. I don’t have to tell you. You can do it because you don’t want to make money from it. Millions of people in the US don’t have a bank account because banks don’t see them as big enough. When they get their cheque from work, they don’t put it in a bank, they have to get it cashed. There’s a series of all these cheque-clearing shops and they rip them off. Loans are another one. Your car breaks down and you need it to get to work. For some, the only option is going to loan sharks, who charge you an extra 50 or 60 per cent. These are all uses of social business You have to look at the problems around you and be innovative.
<

….
LB

If you had a magic wand and there was one thing you could do, what would it be?

MY

To have social business recognised as a businesses entity and define what are the norms and standards. As soon as social business becomes established, the fake people will get involved. They think secretly it will bring them money. The future needs to be innovative. Ask students to enter competitions to design packaging. Every time I speak to students I see overwhelming numbers who want to set up social businesses.

LB

Hopefully, you have helped bring some sanity to the world.

MY

I hope so.

Jim Collins.com | Library

November, 2005Text excerpts from…
Good to Great and the Social Sectors
Why Business Thinking Is Not the Answer
by Jim Collins

The following are short excerpts from the monograph Good to Great and the Social Sectors: Why Business Thinking Is Not the Answer, published in 2005 by Jim Collins. The full monograph can be obtained from many local bookstores and major online booksellers. In addition, you might like to visit the Lecture Hall section of this Web site, where you can find audio excerpts from the monograph.

Author’s Note

During my first year on the Stanford faculty in 1988, I sought out professor John Gardner for guidance on how I might become a better teacher. Gardner, former Secretary of Health, Education and Welfare, founder of Common Cause, and author of the classic text Self-Renewal, stung me with a comment that changed my life.

“It occurs to me, Jim, that you spend too much time trying to be interesting,” he said. “Why don’t you invest more time being interested.”

I don’t know if this monograph will prove interesting to everyone who reads it, but I do know that it results from my growing interest in the social sectors. My interest began for two reasons. First is the surprising reach of our work into the social sectors. I’m generally categorized as a business author, yet a third or more of my readers come from non-business. Second is the sheer joy of learning something new—in this case, about the challenges facing social sector leaders—and puzzling over questions that arise from applying our work to circumstances quite different from business.

I originally intended this text to be a new chapter in future editions of Good to Great. But upon reflection, I concluded that it would be inappropriate to force my readers to buy a second copy of the book just to get access to this piece—and so we decided to create this independent monograph. That said, while this monograph can certainly be read as a stand-alone piece, I’ve written it to go hand-in-hand with the book, and the greatest value will accrue to those who read the two together.

I do not consider myself an expert on the social sectors, but in the spirit of John Gardner, I am a student. Yet I’ve become a passionate student. I’ve come to see that it is simply not good enough to focus solely on having a great business sector. If we only have great companies, we will merely have a prosperous society, not a great one. Economic growth and power are the means, not the definition, of a great nation.

Jim Collins

Boulder, Colorado

July 24, 2005

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We must reject the idea—well-intentioned, but dead wrong—that the primary path to greatness in the social sectors is to become “more like a business.” Most businesses—like most of anything else in life—fall somewhere between mediocre and good. Few are great. When you compare great companies with good ones, many widely practiced business norms turn out to correlate with mediocrity, not greatness. So, then, why would we want to import the practices of mediocrity into the social sectors?

I shared this perspective with a gathering of business CEOs, and offended nearly everyone in the room. A hand shot up from David Weekley, one of the more thoughtful CEOs—a man who built a very successful company and who now spends nearly half his time working with the social sectors. “Do you have evidence to support your point?” he demanded. “In my work with nonprofits, I find that they’re in desperate need of greater discipline—disciplined planning, disciplined people, disciplined governance, disciplined allocation of resources.”

“What makes you think that’s a business concept?” I replied. “Most businesses also have a desperate need for greater discipline. Mediocre companies rarely display the relentless culture of discipline—disciplined people who engage in disciplined thought and who take disciplined action—that we find in truly great companies. A culture of discipline is not a principle of business; it is a principle of greatness.”

Later, at dinner, we continued our debate, and I asked Weekley: “If you had taken a different path in life and become, say, a church leader, a university president, a nonprofit leader, a hospital CEO, or a school superintendent, would you have been any less disciplined in your approach? Would you have been less likely to practice enlightened leadership, or put less energy into getting the right people on the bus, or been less demanding of results?” Weekley considered the question for a long moment. “No, I suspect not.”

That’s when it dawned on me: we need a new language. The critical distinction is not between business and social, but between great and good. We need to reject the naïve imposition of the “language of business” on the social sectors, and instead jointly embrace a language of greatness.

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The pivot point in Good to Great is the Hedgehog Concept. The essence of a Hedgehog Concept is to attain piercing clarity about how to produce the best long-term results, and then exercising the relentless discipline to say, “No thank you” to opportunities that fail the hedgehog test. When we examined the Hedgehog Concepts of the good-to-great companies, we found they reflected deep understanding of three intersecting circles: 1) what you are deeply passionate about, 2) what you can be the best in the world at, and 3) what best drives your economic engine.

Social sector leaders found the Hedgehog Concept helpful, but many rebelled against the third circle, the economic engine. I found this puzzling. Sure, making money is not the point, but you still need to have an economic engine to fulfill your mission.

Then I had a conversation with John Morgan, a pastor with more than 30 years of experience in congregational work, then serving as a minister of a church in Reading, Pennsylvania. “We’re a congregation of misfits,” said Morgan, “and I found the idea of a unifying Hedgehog Concept to be very helpful. We’re passionate about trying to rebuild this community, and we can be the best in our region at creating a generation of transformational leaders that reflects the full diversity of the community. That is our Hedgehog Concept.”

And what about the economic engine?

“Oh, we had to change that circle,” he said. “It just doesn’t make sense in a church.”

“How can it not make sense,” I pressed. “Don’t you need to fund your work?”

“Well, there are two problems. First, we face a cultural problem of talking about money in a religious setting, coming from a tradition that says love of money is the root of all evil.”

“But money is also the root of paying the light and phone bills,” I said.

“True,” said Morgan, “but you’ve got to keep in mind the deep discomfort of talking explicitly about money in some church settings. And second, we rely upon much more than money to keep this place going. How do we get enough resources of all types—not just money to pay the bills, but also time, emotional commitment, hands, hearts, and minds?”

Morgan put his finger on a fundamental difference between the business and social sectors. The third circle of the Hedgehog Concept shifts from being an economic engine to a resource engine. The critical question is not “How much money do we make?” but “How can we develop a sustainable resource engine to deliver superior performance relative to our mission?”

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I do not mean to discount the systemic factors facing the social sectors. They are significant, and they must be addressed. Still, the fact remains, we can find pockets of greatness in nearly every difficult environment—whether it be the airline industry, education, healthcare, social ventures, or government-funded agencies. Every institution has its unique set of irrational and difficult constraints, yet some make a leap while others facing the same environmental challenges do not. This is perhaps the single most important point in all of Good to Great. Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.

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Business executives can more easily fire people and—equally important—they can use money to buy talent. Most social sector leaders, on the other hand, must rely on people underpaid relative to the private sector or, in the case of volunteers, paid not at all. Yet a finding from our research is instructive: the key variable is not how (or how much) you pay, but who you have on the bus. The comparison companies in our research—those that failed to become great—placed greater emphasis on using incentives to “motivate” otherwise unmotivated or undisciplined people. The great companies, in contrast, focused on getting and hanging on to the right people in the first place—those who are productively neurotic, those who are self-motivated and self-disciplined, those who wake up every day, compulsively driven to do the best they can because it is simply part of their DNA. In the social sectors, when big incentives (or compensation at all, in the case of volunteers) are simply not possible, the First Who principle becomes even more important. Lack of resources is no excuse for lack of rigor—it makes selectivity all the more vital.

Copyright © 2005 Jim Collins, All rights reserved.