Can banking help fight health inequalities?

Guest post by Cam Donaldson

In 2010, Glasgow Caledonian University established the Yunus Centre for Social Business and Health. Muhammad Yunus is the 2006 Nobel Peace Laureate, awarded jointly with Grameen Bank for their efforts to relieve poverty, largely through promulgating microcredit. Grameen - 97% owned by its borrowers - issues small collateral-free loans, often for enterprise, to millions of the poorest people in Bangladesh and in several other countries.

Yunus does not fund our Centre. Why, then, is a UK University working with him, and what has microcredit got to do with health? Let me try to explain by bringing together three strands of thought.

Cam, with Muhammad Yunus and GCU Principal Pamela Gillies

First, on health, a more explicit strategy of inclusion combined with fair loan provision - essentially what Grameen promote - could facilitate health improvement. Gaps in life expectancy between the richest and poorest areas of Glasgow have grown to 28 years. We already have a world class NHS, so solutions do not lie there. Even public health policy seems more like “products chasing diseases”. We identify ‘risk factors’ and then target products (mainly drugs) at them. Either that or we tell people to exercise more, eat less fatty foods, give up smoking and drink less. But, can health be ‘compartmentalised’ like this? Further away from diseases and risk factors are the root causes - it is low income, societal exclusion and hopelessness that kill people. Without working on the ‘causes of the causes’ more-conventional attempts at public health improvement will have limited impact.

Second, on banking, the sector has been bolstered by national bailouts and quantitative easing. The bonus culture continues. Banks pander to middle class ‘trendies’ with more flexible opening hours (a 1980s phenomenon on which they had cut back!) and the entry of flash providers like Metro and Virgin. As we argue whether regulation goes far enough, the poorest are largely ignored – many trapped on benefits, which, despite being squeezed, people still cannot get off because, whilst raking in billions from QE, banks will not go near such people or their business ideas.

Government matches this lack of support, not allowing the welfare system to become a facilitator. They could do this by permitting schemes allowing income from welfare to taper off gradually whilst that from private sources grows - providing a minimum income overall and a guarantee of a return to welfare if such businesses fail. No less a guarantee than the banks have had, and one with much less risk – if a business is a success, one more person is off welfare and likely creating jobs for others. If it fails, then, at worst, we are merely back where we started, although it is thought that having tried and failed still enhances future job prospects. Money is placed more directly in the hands of those more likely to spend, contributing in a small way to getting the economy moving.

Third, on the ‘Big Society’, implementing some of the above would mean society could truly claim to be big, ensuring enhancement of well-being amongst the worst off. So far, many examples of the Big Society merely show it being captured by the middle class to their own advantage – with many more schemes in affluent as opposed to more-deprived areas, despite notable exceptions.

So here it is. To create a truly Big Society, and enhance the health and well-being of the poor, there is a role for banking. Examples are now spreading to the West – Fair Finance in London, started up by the son of Bangladeshi immigrants, is an excellent case. But we need more and they need more strategic support. Hence, the attempt to bring Yunus’ ideas to the most deprived areas of Scotland and the creation of our research centre to assess its impact. 

If it can be done in Bangladesh, why not here?