Financial system fundamentally wrong: Muhammad Yunus

Nobel laureate and micro-finance founder Muhammad Yunus on Tuesday said the existing financial and banking systems in the world have fundamental flaws as they direct people to work only for their own benefit, not caring about society.

"I think the existing banking structure is fundamentally wrong. The policy of the banking system is such that the people who have more money will get higher loans. This is the base of any banking system.

"Ideally it should have been just the reverse. One who has less should get the loans first," Yunus said on 'Ethics and Economics' at the Tata Steel Kolkata Literary Meet here.

"That's why I feel that even today the very basis of the financial system is wrong. When I tried to trace the reason of this fundamental error, I found it is wrong as the whole economy is based on people's selfishness."

Yunus, who inspired the model of social business in Bangladesh, said the seed of selfishness is sown within the theory of the economic system that is followed and urged people to also work or do business for the benefit of society and its people, besides looking for their own profitability.

"The seed of selfishness and self-centricity is sown within the economic theory. It teaches people to work or do business just for their own benefit. But I think if we can add selflessness to our work, it changes the whole perspective.

"People can do business and make profit while also thinking about society's interest," Yunus said, adding that he has started almost 60 such businesses in Bangladesh, all of which are aimed at addressing a social issue.

About his initiative, Yunus, the founder of Grameen Bank, said how giving loans for building sanitary toilets for the poor of Bangladesh helped uplift the country's health index while the introduction of 'Grameen Phone' by his bank gave women a means to earn and empowered them.

The noted economist also pointed out the basic flaw in the education system, stating that it is somewhat enforced on people and never discusses the purpose of learning.

"The drawback of the education system is that it never discusses the purpose of learning and how an individual can relate to the knowledge he has acquired. Learning is good but it should serve a certain purpose," Yunus said.

"The current education system is kind of enforced where one is compelled to learn what they are taught but there is no way to assess why he needs to learn it, how would he use that knowledge in his life," he added.

--IANS

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