Muhummad Yunus has already produced one great breakthrough. He transformed the concept of aid by pioneering micro-lending, tiny loans as small as $20 to poor villagers, and has lifted many millions out of poverty as a result. He won the 2006 Nobel Peace Prize in recognition.

Now he is pressing for a second. This time he’s looking to transform nothing less than capitalism itself. Not in any destructive way: “I am not asking that we sacrifice part of capitalism,” Yunus said during a visit to Australia last week. “I am asking that we add another part.”

And that is? Its essence, I think. Yunus wants to give capitalism a soul.

That’s not what he calls it. He talks about something he calls the “social business”. It’s a business in every sense, but with two differences – it’s set up to address a social problem, and its investors get back their initial capital but no more. Earnings are reinvested in the business.

It’s not a charity. It’s not an NGO. Charities and NGOs spend half their time and energy raising funds just to keep running.

The social business starts with all the subscribed capital it should need. And it’s not a Trojan horse for government subsidies. The social business must be self-sustaining. It’s not just a concept. His Grameen group has launched four and he was in Australia to urge many more. So far, his social businesses have all been joint ventures with major corporations. Grameen joined with the French food multinational Danone to found Grameen-Danone in 2006, selling high-nutrition yoghurt to poor kids in Bangladesh for about 10¢ a serve.

Similarly, Grameen-Adidas sells shoes for $1 as a way of preventing all manner of foot disease in Bangladesh. Grameen-Veolia sells affordable drinking water, and BSF-Grameen sells cheap impregnated mosquito nets to prevent malaria.

“This is just the beginning,” says Yunus. “Whatever the problem is, you can create a social business to solve it. You have a choice – if there is a problem, you can grumble about it, or you can complain to the government to do something about it, or you can start a social business and deal with it.”

As Yunus wrote in his book Creating a World Without Poverty: “It is tempting to simply dump our world’s social problems into the lap of government and say ‘here, fix this.’ But if this approach were effective, the problems would have been solved long ago.”

Need to create jobs? Want to develop more renewable energy? You can design a social business to do something about it, says Yunus.

“I have just been in Japan where everyone is talking about the problem of suicides, 100 a day. Here everyone talks about the problem of the indigenous people’s life expectancy. Well, you can create a social business to solve it.”

But why would investors put money into a venture that promises to return no more money than they started with?

Because conventional corporations are an outgrowth of only one aspect of the human being, he argues: “The part they appeal to is selfishness. But humans also have a selfless part, and social business is an expression of that part. The two only make sense together.

“I can make my mark in the world, not just money. At the end of my life, has it been worth living? At the moment, you spend your life stacking up money and goodbye. And that’s it?”

Yunus, dubbed the “banker to the poor” for his micro-lending breakthrough, believes the social business brings material help to the poor countries but also spiritual purpose to the rich.

At the global level, Yunus challenges the single-purpose corporation-led globalisation. There are entire sections of the global economy “that ignore the poor, writing off half the world’s population”, he argues in his book. “Instead, businesses in these sectors focus on selling luxury items to people who don’t need them, because that’s where the biggest profits are.

“I believe in free markets as sources of inspiration and freedom for all, not as architects of decadence for a small elite.”

But while Yunus encourages companies to discover their souls, he doesn’t think that the future of the social business depends on corporate goodwill alone: “Anybody can start a social business. You don’t need a mega corporation. Some retired people have lots of skill and experience and many of them can create a social business.”

Dr Yunus demands to know how parents in the developed countries expect to inspire their children: “In the rich countries, young people wonder what the purpose is. Their parents have made money, the houses are there, the cars are there, all manner of gadgets are there – ’so what should I do with my life?’

“You might be a big CEO … But at the moment you sit down to breakfast with your 17-year-old daughter or your 21-year-old son and you have hardly anything to talk to each other about.

“But the moment you start to talk about starting a social business, the moment you ask what social problem you’re going to solve – then, then you are talking about a new world, and you suddenly have something to talk to each other about. Young people are really inspired by this idea.”

That’s certainly true in Australia, according to Cheryl Kernot, the former Australian Democrats leader who these days teaches social entrepreneurship at four business schools across Australia. “All the courses are full, and it’s the students who are driving it,” she says.

Australia already has a nascent social business sector. Prominent is Social Ventures Australia, headed by Michael Traill. He cites the standout example of ABC Goodstart, the new company formed to take over part of the failed ABC Learning childcare business. It will have an annual turnover of $600 million from 678 centres, but it’s designed not to make money but to provide affordable, quality childcare.

And there are others but, overall, Traill describes the size of the genuine social business sector in Australia as “bugger all”, with just a few tens of millions of dollars in funding. And vast potential.

Dr Yunus says that modern capitalism “has squeezed out the spiritual part of ourselves”. The social business is his mechanism to make room to bring it back.

Peter Hartcher is the international editor.

Hundreds of Suncorp staff have been receiving incorrect paychecks / File

SUNCORP has suffered a hiccup to its internal restructuring program after a new payroll system failed to deliver accurate paychecks to hundreds of personal insurance staff.

In an internal memo seen by The Courier-Mail, Suncorp’s personal insurance head Mark Milliner apologises for the inconvenience and being “slow to communicate about the impact”.

Problems were the “unexpected result” of launching a new single payroll system four weeks ago for nearly 14,000.

A Suncorp spokesman said that only 280 people had problems.

Some problems were to be expected with any major project, he said. Most had involved incorrect payments, although some people did not get paid. Problems stemmed from “non-standard” working arrangements and late or incorrect paperwork.

The “Our People Space” payroll project was highlighted at Suncorp’s recent half-year results. Chief executive Patrick Snowball said it had been completed on February 1.

It comes as staff handle claims for recent wild Victorian storms.

Suncorp is yet to unveil its final bill but some analysts expect it to reach the $200 million reinsurance trigger.

The Greens have called for an end to $2 ATM transaction fees / File  AAP

THE Australian Greens want to ban major banks from charging $2 fees for non-customers to withdraw cash from their ATMs.

The party will propose amendments to the trade practice laws to stop major banks charging for Automatic Teller Machine use.

But it won’t advocate the fee ban for credit unions, building societies or independent ATM operators, such as corner shops and clubs.

Greens leader Bob Brown says the multi-billion dollar major banks don’t need the extra annual $680 million generated from inflated ATM fees.

“Australians spend around $1000 on bank fees (annually), 20 per cent more than in the UK where ATM fees don’t exist,” he said.

The $2 fee doesn’t reflect the real cost of processing an ATM transactions, he said.

“The Reserve Bank estimated it was about 50 cents in 2000, which is likely to be even lower now.”

Credit card interest rates are on the rise / File – Karen Collier, Herald Sun

MILLIONS of credit card customers will be whacked with another interest rate rise amid fears the global financial crisis is being used as an excuse to rort consumers.

The Commonwealth Bank and Westpac will slug card holders an extra .25 per cent from next week, in line with the Reserve Bank’s rise in official rates.

Major rivals are expected to quickly follow despite pleas for a reprieve for households battling to pay off bills.

InfoChoice chief Shaun Cornelius said customers across Australia were being charged an extra $1.2 billion a year because of a blowout between the cost of paying on plastic and the official cash rate since the financial crisis.

Those with no-frills cards have suffered most from the refusal of banks and other providers to fully pass on official cuts, only to jump on the rate rise bandwagon once the RBA moves up.

Mr Cornelius said the widening margins were costing customers an extra $110 a year on balances of $3000. Banks yesterday hit back, arguing credit cards were a far riskier form of lending than home loans, and that they still faced rising funding costs.

Westpac spokesman David Lording said credit card rates were more dependent on international conditions.

But Mr Cornelius said big banks were running out of excuses given improving economic conditions and ballooning profits, saying: “Bad debts are reducing and it’s becoming cheaper for the banks to borrow money. This seems to be a case of what goes up doesn’t go down.”

The InfoChoice study shows customers with low-rate credit cards were charged an average 12.75 per cent in January, 9 per cent above the Reserve Bank rate.

PETER MARTIN ECONOMICS CORRESPONDENT

MORTGAGE holders can breathe a guarded sigh of relief after the first official rate rise of the year. Each of the lenders that has responded has passed on no more than the Reserve Bank’s 0.25 percentage point increase.

But each has also complained about ”cost pressures” and hinted it would not be able to continue to hold the line. 

Calculated on the average interest rate of the four major banks before yesterday’s increase.

After imposing an outsized increase of 0.37 of a percentage point increase when the Reserve last lifted rates in December, the Commonwealth Bank this time kept its increase to 0.25 of a percentage point but warned it ”continues to experience increases in wholesale funding costs”.

The ANZ, which pushed up rates 0.35 points last time , fell in line with the Reserve Bank but warned it was ”continuing to absorb additional funding costs” to balance ”very real commercial pressures with the interests of our customers and the broader community’s interest in the economic recovery”.

St George, owned by Westpac which in December led the pack with a 0.45 point increase, said it would only push up rates 0.25 points to take ”a responsible approach to managing interest rates and funding cost pressures”.

Even the National Australia Bank, which was the only one last time to hold its increase to 0.25 points, said this time it would need to examine the ”cost of providing funds” before deciding.

Within minutes of the Reserve’s announcement, the Treasurer, Wayne Swan, sent a message to the banks that there was ”absolutely no justification whatsoever for any increase over and above the official cash rate increase”.

”If we look at the net interest margins for the major banks, they have improved to pre-crisis levels,” he told a Parliament House press conference. ”I have made my views very clear about what Westpac did last time – it was not justified and they thoroughly deserved the backlash they subsequently suffered.”

The latest increases make ANZ the most expensive bank with a standard variable mortgage rate of 6.91 per cent, and NAB the cheapest with a rate of just 6.74 per cent if it does no more than pass on the official increase. If Westpac passes on the increase in full, it will lead the pack with a standard variable rate of 7.01 per cent, and be the first bank to push its mortgage rate above 7 per cent.

Mr Swan said rates were still at ”1970s lows”. ”I think families and businesses understand that rates can’t stay at emergency levels forever, although for someone with a mortgage, it’s tough stumping up an extra $50 a month.”

The governor of the Reserve Bank, Glenn Stevens, described the rise as ”a further step” in the process of returning rates to average levels now that economic growth was likely ”close to trend”.

He has previously stated he expects two to four such rises this year.

The increase will add about $47 to the monthly cost of servicing a $300,000 mortgage, and $63 to a $400,000 mortgage.

Meanwhile, the Bureau of Agricultural and Resource Economics has forecast a 15 per cent increase in mineral and agricultural commodity exports, reaping $186.8 billion in 2010-11.

The drive in commodities exports comes on the back of surging demand from China and India for iron ore and coal.

with Tom Arup