NEW STANDARDS

He also argued for new accounting and legal standards that would allow for a second separate industry, so-called ‘social businesses’ such as Yunus' own Grameen Bank, to emerge.

Yunus said President-elect Barack Obama is in a unique position to ‘create his own history’ and rebuild the financial system in such a way that an entirely new class of companies, driven by both profit motive and a desire to improve society, can be launched.

Yunus was in Silicon Valley to receive the James C. Morgan Global Humanitarian Award as part of the Tech Awards. The award's past recipients include Microsoft Corp co-founder Bill Gates and Intel Corp co-founder Gordon Moore.

Grameen accepts no funds from outside donors, and finances all its loans from deposits. It does not require any collateral. Borrowers in groups of five self-regulate each other, ensuring repayment.

The bank claims a loan recovery rate of 98 per cent.

The success of the bank has spurred similar efforts around the world, including Grameen America, which said its bank loans have just topped $1 million, with 380 borrowers getting loans of about $1,500 to $2,500.

The bank's US push has been met with some skepticism that the Grameen model would work here. But the 68-year-old Yunus said the financial crisis has proved that social businesses like Grameen are actually more sound than traditional banks.

PARALLEL SYSTEM

"They say 'total reliance on collateral and lawyers and it is 100 per cent foolproof, nothing can go wrong.' And built a whole system on that belief. And this disaster has proven everything wrong."

... contd.