Addressing global goals through social business ventures

A charity dollar has only one life. A social business dollar can be invested over and over again,” Professor Muhammad Yunus. The 2015 Global Social Business Summit will provide an ideal platform for practitioners, partners and supporters of the social business landscape to collaborate and learn from each other to leverage best practice approach and tools to enable social business ventures to continue addressing key issues of clean water, education, health, climate change and unemployment. In the lead up to this global event, here are some social businesses who are providing employment opportunities and impacting thousands of lives.

What is a social business?

A social business is a financially sustainable business created to solve a social problem through sound business practices. Although original investments may be recouped, all potential profits are reinvested to increase the organisation’s social impact.

Recently the world’s leaders adopted the United Nations 17 ambitious global goals for sustainable development, which if carried out will eradicate poverty, fight inequality and injustice, and combat climate change.

Each global goal, especially goal’s #1 no poverty and #2 no hunger are being addressed by some of our social business entrepreneurs in developing economies in Eastern Europe, Africa, and Central and South America.

For example, in northern Uganda, the LRA civil war displaced 1.5 million people who now face a lack of income, low crop yields and high youth unemployment. Social businesses like Aryodi provide displaced small-holder farmers with a means of earning from producing high quality honey.

In Colombia, Bive provides low cost high quality healthcare to over 15,000 patients across the Caldas region, 90% of whom are from low and middle income families.

Since Prof. Muhammad Yunus practiced the concept of social business in Bangladesh over 30 years ago, we have started to see this applied in developing economies around the world. As the world becomes more connected, we are working hard to develop tools and financial instruments that will help social businesses in developing economies to access commercial capital without mission adrift.

How can the social economy leverage commercial capital without mission adrift?

Across the world, small and medium enterprises (SMEs) lack access to finance. With 50 to 250 employees, SMEs are too large for micro-financing and too small for commercial banks. This missing middle is estimated to range between $2.1 trillion and $2.5 trillion in developing countries alone. One of the key innovative financing instrument that we have committed to piloting in partnership with the Rockerfeller Foundation is the Social Success Note (SSN).

The SSN is a loan linked to a pay-for-performance payment. As with other pay-for-performance contracts such as social impact bonds, it involves three parties: a social enterprise or SME, an investor and an outcome payer/donor. The SSN is attractive because it aligns the incentives of the different actors – it’s a win, win, win for all parties involved. Read more about the SSN here.

Innovative tools like the SSN and our ability to continuously reach, build and support game-changing social business entrepreneurs in developing economies could not be realized with the on-going support of our many partner organisations, supporters and donors.

Organisations like The Boston Consulting Group, who have recently signed a partnership agreement enabling us to become their sixth Global Social Impact Partner, will help us further advance social business and we are excited to work with BCG.

For more information, contact us at info@yunussb.com.

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