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YSB contributes to EVPA Report on Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance

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Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance

How can venture philanthropy organisations, social investors and impact investors, improve the way they allocate resources to their investees?

To answer this question the EVPA Knowledge Centre embarked on a nine-month journey with a group of over 30 experts, in which we took part as well. The result is the new EVPA report “Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance”, launched at the EVPA Annual Conference in Oslo on 9 November 2017. This new piece of research looks at how funding can be shaped in a way that meets the financial needs of the social purpose organisation (SPO) and at how different actors can collaborate in the VP/SI space to bring more resources to SPOs.

EVPA has developed a three-step process to help VP/SI organisations find the most suitable financial instrument to support a SPO. The process is known as tailored financing and it is addressed in the first part of the report.

The report also focuses on hybrid finance, which is defined as the allocation of financial resources to impact-oriented investments, combining different types of financial instruments and different types of risk/return/impact profiles of capital providers.

One of the main conclusions of the report is that tailored financing and hybrid finance promote a more efficient and effective deployment of resources in the VP/SI space. They can represent a way to solve the existing funding gap that prevents SPOs from gaining access to the capital needed for achieving self-sustainability and for scaling.

You can download the report here

If you have questions about the report, you can contact the EVPA Knowledge Centre at knowledge.centre@evpa.eu.com

Prof. Muhammad Yunus Releases New Book “A World Of Three Zeros”

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A World Of Three ZerosOur Chairman and Co-Founder, Prof. Muhammad Yunus offers his vision of an emerging new economic system in his new book ‘A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions’.

Yunus created microcredit, invented social business, and earned a Nobel Peace Prize for his work in alleviating poverty. Now he declares it’s time to admit that the capitalist engine is broken – that in its current form it inevitably leads to rampant inequality, massive unemployment, and environmental destruction. We need a new economic system that unleashes altruism as a creative force just as powerful as self-interest.

bee farmer

At YSB, we are really excited to have some of our businesses such as Golden Bees feature in the new book, showing how the concept of social business can be realised in our shared vision for A World of Three Zeros.

In his book, Yunus explains how thousands of people and organisations have already embraced this vision of a new form of capitalism, launching innovative social businesses designed to serve human needs rather than accumulate wealth. They are bringing solar energy to millions of homes in Bangladesh; turning thousands of unemployed young people into entrepreneurs through equity investments; financing female-owned businesses in cities across the United States; bringing mobility, shelter, and other services to the rural poor in France; and creating a global support network to help young entrepreneurs launch their start-ups.

In A World of Three Zeros, Yunus describes the new civilization emerging from the economic experiments his work has helped to inspire. He explains how global companies like McCain, Renault, Essilor, and Danone got involved with this new economic model through their own social action groups, describes the ingenious new financial tools now funding social businesses, and sketches the legal and regulatory changes needed to jump start the next wave of socially driven innovations. And he invites young people, business and political leaders, and ordinary citizens to join the movement and help create the better world we all dream of. 

‘A World of Three Zeros’ is available now from all good bookshops.

Our 2016 Annual Report is online!

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Whoop whoop! Our social businesses almost doubled their client base last year. The 2016 Annual Report is out with a personal message from Prof Yunus:

“Let’s have 1 percent of the economy be social businesses in the next five years”. 

Download here

Survey on Scaling Social Businesses In Emerging Economies

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What keeps social entrepreneurs in developing countries from growing their ventures? Around the world social entrepreneurs are creating innovative businesses that reduce poverty and improve the lives of their customers. These pioneers often encounter many hurdles along the way that make growing a social business a significant challenge. With insights from more than 120 interviews with early-stage social entrepreneurs in developing countries, we explore the common financial and non-financial obstacles they face.

The survey showed that access to financing is still a major issue for most of the entrepreneurs: loans are expensive, require significant personal collateral and traditional financing providers don’t take the social mission of the business into account. Besides access to capital, especially in the missing middle, social entrepreneurs also have challenges finding new customers for their products and services, managing their operations and technical excellence, as well as recruiting and retaining high quality staff. Based on our findings we distilled specific conclusions and recommendations for entrepreneurs, investors and intermediaries. We want to thank the Robert Bosch Stiftung, which has made this publication possible.

India embraces Social Business

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From launching the Festival of Innovations to introducing a Masters program on Social Entrepreneurship and Innovation, India, particularly the Tamil Nadu region, is keen to innovate and drive social entrepreneurship.

India seeks Prof. Yunus’ help on social business, innovation and microfinance.

Here are the highlights.
Prof. Muhammad Yunus started the year at the 102nd Indian Science Congress, where he was awarded a gold medal by the Indian Prime Minister, Narendra Modi, for giving the poorest a life of hope, opportunity and dignity. He was also invited by Prof Anil Gupta of IIM-A to launch the Festival of Innovations at Rashtrapati Bhawan where he co-chaired a session with the President of India, Pranab Mukherjee. The Festival of Innovations is an initiative of the National Innovation Foundation.

Seperately, In a high profile panel discussion televised by NDTV, Prof. Muhammad Yunus was invited to speak about the Grameen experience in ‘banking for the poor’ and the relevance of the social business model for India.

Prof Yunus launched a Masters program in Social Entrepreneurship and Innovation at the Rajiv Gandhi National Institution of Youth Development (RGNIYD) in Chennai. He also met with the Governor of Tamil Nadu where he advised him on address youth unemployment in the state through entrepeneurship.

He closed his India trip with a roundtable held in his honour by the Maharashtra Finance Minister to seek his advice on converting the state’s 1.7 million Self Help Groups into “super happiness groups” through social business! Read more here.

 

For more information on YSB India, contact:

Aarti Wig
Phone: +919833214428
Email: aarti.wig@yunussb.com

Introducing the Social Success Note

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YSB presents the Social Success Note in partnership with The Rockefeller Foundation

The Social Success Note aims to leverage commercial capital for social good. 

Crowding in commercial capital to finance social businesses

Across the world, small and medium enterprises (SMEs) lack access to finance. They experience a missing middle estimated to range between $2.1 trillion and $2.5 trillion in developing countries alone. This financing gap is even more acute for impact-oriented SMEs as these enterprises look to achieve both a social and financial return which may, in certain circumstances, come into conflict.
Money, however, is not the problem. There is an estimated $210 trillion invested commercially by institutional and retail investors around the world. Over recent years, a variety of innovative financing tools, including impact investing and results-based financing, have emerged to help channel some of this capital to achieve greater social outcomes. The most prominent example of this movement is the emergence of Social and Development Impact Bonds that seek to mobilize commercial capital to fund proven social programs, with a promise to be paid back by government if these programs achieve desired social outcomes. The Social Success Note extends this approach to social businesses.

Partnering with The Rockefeller Foundation
The Rockefeller Foundation has played a decisive role in activating a dynamic around impact investing. The Foundation is supporting the use of innovative financing mechanisms to mobilize private sector capital through its “Zero Gap” portfolio. Zero Gap is focused on solutions that can ultimately catalyze large-scale capital from institutional investors, as well as households and retail investors.
Within this portfolio, Yunus Social Business and The Rockefeller Foundation are developing the Social Success Note (SSN), an innovative pay-for-success financing mechanism that addresses the investment gap for impact-oriented SMEs and social businesses. Through a new alignment of incentives and interests among entrepreneurs, investors, and philanthropic outcome payers, the SSN holds the promise of addressing the missing-middle financing gap for impact SMEs by mobilizing commercial capital into these businesses while overcoming the long-entrenched trade-off between social impact and financial return.

Piloting the Social Success Note
The Social Success Note is a new and unique financial innovation that allows capital to flow into underfunded sectors (e.g., low income geographies and “push” product sectors) deemed traditionally too risky or unprofitable for mainstream capital. It also allows existing social businesses to delve deeper into their area of social impact, like targeting a poorer customer segment than traditional IRR investment hurdle rates would allow.
Yunus Social Business (YSB) and The Rockefeller Foundation are working together to launch the pilot in 2016 with one of YSB’s investment-ready social businesses.

Download the Social Success Note handout.

Brazil launches the Yunus Corporate Action Tank

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Yunus Corporate Action Tank

Registrations now open until 22 January 2016

The first of its kind, Yunus Negocios Sociais Brasil has just launched its first accelerator program targeted at large corporations. The Yunus Corporate Action Tank aims to encourage projects such as the Grameen-Danone partnership, whereby large corporations can help address social issues such as malnutrition through the social business model. The Yunus Corporate Action Tank accelerator program will commence in March 2016.

Location: Brazil
Application deadline: 22 January 2016
How and where to apply: http://www.yunusnegociossociais.com/#!consultoria/ceqv

Are you interested in developing a social business for your company or a joint venture such as the Grameen-Danone model to help address a social problem in Brazil or globally?

The benefits for your organisation are two-fold: not only will your business contribute to addressing the social problems associated with poverty, unemployment, hunger, education, climate change and more. Social businesses are purpose driven and tend to attract top talent and fosters innovation within a traditional business setting.

Partners of this program include Singularity University, Mandalah, Data Popular, League of Intrapreneurs, BOX1824, Dom Cabral Foundation and Bank of America.

To find out more, visit Yunus Negocios Sociais Brasil website.

Private Sector Foundation sets up social fund in Uganda

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The Chairman for Private Sector Foundation Uganda (PSFU) Patrick Bitature has said that they are in the final stages of setting up a social trustee fund.

The fund will further improve the private sector’s Corporate Social Responsibility (CSR). Speaking at the inaugural graduation of the Yunus Social Business (YSB) accelerator at the Uganda Industrial Research Institute (UIRI) on Friday where he was the guest of honour.  Bitature noted that it is time for the private sector to accelerate their efforts in pushing the economy to a higher level. “We are starting this fund because we want toimprove lives of people positively through a uniformed and improved CSR,” said Bitature.

PSFU was founded in 1995 to serve as a focal point for private sector advocacy as well as capacity building and it’s made up of over 185 business associations, corporate bodies and major public sector agencies that support private sector growth. According to Bitature, PSFU has been and continues to be Government’s implementation partner for several projects and programmes aimed at strengthening the private sector as an engine of economic growth.

“CSR is not only giving back to people but also improve their livelihood and we should use it to create jobs and tackle the issue of unemployment through social ventures,” said Bitature. PSFU’s Executive Director, Gideon Badagawa said that the fund will be launched early next year.

More than 15 entrepreneurs graduated with certificates from YSB and were told to put their newly acquired knowledge in practice by ensuring that they create jobs through social innovations. YSB’s executive director, Eriab Kizza said that they are working very hard to identify at least 1,000 social jobs annually because there are many untapped opportunities in the social business sector. YSB began its operations in Uganda in 2013 as a pilot programme with the African Development Bank devoted to promoting and creating an environment within which social business can thrive in Uganda.

YSB was founded by Yunus Muhammad, a Bengali social entrepreneur, Banker, Economist and civil society leader. Some of the graduates included proprietors of Kawempe Youth Center, Kitengesa Rural Library, Uganda Development Services, Nambi-Sepuya Library, Rukungiri Dairy Farmers Project, Bwega Information Library, Awamu Biomas Energy among others. YSB operates in seven countries of Colombia, Brazil, Haiti, Tunisia, Uganda, India and Balkans.

Story by By Isaac Baligema.

Originally published in http://www.newvision.co.ug/news/675836-private-sector-foundation-sets-up-social-fund.html