M

uhammad Yunus, the Bangladeshi banker and economist who won a Nobel Prize for his work in microfinancing, has some words of advice for local businesses.

“Business is also about how to solve people’s problems. It’s not only how to create money for yourself,” Yunus said at the launch of the Agribusiness Development Service (LPA) Pusur Lestari Cooperative in Kurung, Ceper in Klaten, Central Java, earlier this week.

Yunus said that Grameen Bank, which he established to help the poor, specializes in providing microcredit to families in villages throughout Bangladesh.

The bank provides loans without collateral provided that it can receive a guarantee that the funds will be spent on productive purposes.

Speaking to participants of an international microfinancing conference in Yogyakarta earlier in the week, Yunus said that microfinancing and microcredit could be conducted as a “social businesses” that were profitable, although making money would not be their main objectives.

Yunus said that the main mission of Grameen was solving people’s problems, and as such, loans were provided to help people with problems in their daily lives that were not always connected to income-generating activities.

Yunus also said that he had learned that loans given to women were more effective than the ones given to men.

Women debtors, according to Yunus, were superior to men and should be regarded as a spearhead in granting credit for business purposes.

“They work better for the family, they have cautious minds, they are very creative and they want to change their lives very quickly,” Yunus said.

On the different lending system applied by LPA Pusur Lestari, Yunus said the cooperative’s practices could be maximized for the benefit of its members and their neighbors — if its money was tightly and carefully controlled.

LPA Pusur Lestari Cooperatives is part of the corporate social responsibility program of PT Tirta Investama (Aqua Danone).

It targets 97 subdistricts along the banks of Pusur River in the districts of Polanharjo, Delanggu, Juwiring, Tulung and Wonosari. So far, 36 out of the 97 targeted subdistricts have been developed.

Separately, Cooperatives and Small and Medium Enterprises Minister Syariefuddin Hasan said that Indonesia had applied the so-called KUR, or people’s business credit program, to reduce unemployment and eradicate poverty in the nation.

Launched by President Susilo Bambang Yudhoyono in 2007, the KUR program also offers microcredit to the poor, although it has a different appoach to collateral than Grameen Bank.