Richard Branson wants to use his recent purchase of British bank Northern Rock to offer small loans to the poor and urged Wall Street bankers to use their bonuses to help repair the economic damage they caused.
Virgin Money, the banking arm of Branson's Virgin group, agreed last month to pay the government more than $1.2 billion (764.7 million pounds) for Northern Rock, which was nationalized in 2008 after the financial crisis triggered a run on the institution.
We're sitting back trying to work out radical ways of running it differently than banks have been run in the past, Branson told Reuters in an interview in New York to promote his new book, Screw Business as Usual, which pushes companies to not only focus on profit but also on doing good in the world.
Microcredit's worked in Africa and India, maybe it could even work in somewhere like the U.K., said the billionaire entrepreneur. I haven't even mentioned it yet (to the board) but I am going to try and push it through.
Microfinance - developed more than 30 years ago by Bangladeshi economist Muhammad Yunus, who won the Nobel Peace Prize in 2006 for his efforts - traditionally targets women and, experts say, has default rates of just a few percent.
The concept of granting tiny loans has lifted millions out of poverty in places like Bangladesh, India and Africa. Yunus has also opened branches of his nonprofit Grameen Bank in New York City and elsewhere in the United States.
I started (in business) when my mother found a necklace on a train, handed it in to the police and nobody claimed it, Branson said. That two or three hundred dollars kick-started my business. But today there's no way you could get that from a bank, you get bigger loans or you get no loans.
Virgin Money, partly backed by U.S. private equity tycoon Wilbur Ross, had been an Internet-only provider of savings products, credit cards and insurance but it plans to expand Northern Rock's 75 branches in northeast England.
The purchase boosts Virgin Money's customers to 4 million and the company says it plans to list on the stock market.
SCREWED UP BIG TIME
Branson writes in his book Screw Business as Usual that if executives helped break something, then they should help fix it. He told Reuters the banks were not doing enough to help clean up the mess created by the global financial crisis.
People in the banking community get big bonuses, they must put those bonuses to good use and try to get out and help people less fortunate than themselves, Branson said. They have quite a lot of balancing of books to do.
Wall Street paid out $20.8 billion in cash bonuses in 2010. Average bonuses are forecast to decline up to 30 percent this year, according to consulting firm Johnson Associates, as banks cut costs and lay off workers in a weak trading environment.
Corporate greed is a key motivation of the Occupy Wall Street movement against economic inequality, which began in New York on September 17, sparking rallies across the United States and re-energizing similar movements elsewhere in the world.
Business needs a heart. In the past business hasn't had a heart. Business has been all about making money, which is fine, but it hasn't been about being a responsible citizen, Branson said. We're better equipped I think than social workers and politicians to sort out the world's problems.
Branson's book will benefit Virgin's nonprofit foundation Virgin Unite.
(Editing by Mark Egan and Cynthia Osterman)