More success stories will take social business to next level

Md Fazlur Rahman

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Social business, which is already off to a good start, now needs some success stories to take off in a big way, experts said.

Martin Loeffler, chief executive officer (CEO) of Grameen Caldas, a social business consulting firm and incubation centre in Colombia, said the fledgling concept, which is the brainchild of Prof Muhammad Yunus, has already gained much momentum.
“The idea has already got so much attention — you just need to look at the number of people that took part in the Social Business Day event. Among them were a lot of corporations — they already believe in it.”

For the final jump to becoming a mainstream and well-established programme, he said the advocates would now have to present more concrete and successful examples.

Loeffler, also the director of California Institute for Social Business, however, does not think that social business would completely eliminate the traditional forms of business.
“We are not against anything. We are not saying that normal businesses are bad — they create a lot of social values by generating employment and giving services to consumers.”

The expert said many corporations could set up a social business arm to solve the social problems they are creating.

“Every company or institution has its footprint in terms of carbon, garbage, water usage and waste. Those problems can be taken out in a self-sustainable manner by creating social businesses around the for-profit businesses.”

Loeffler’s comments came on the sidelines of the fourth Social Business Day, which took place in Dhaka on Friday, attracting about 1,000 participants from around the world.

According to Prof Muhammad Yunus, social business is a cause-driven business where the investors or owners can gradually recoup the money invested but cannot take any dividend beyond that point.

The purpose of the investment is purely to achieve one or more social objectives through the operation of the company; no personal gain is desired by the investors.
Saskia Bruysten, co-founder and CEO of Yunus Social Business in Germany, said the idea is going places.

“Big development agencies are slowly opening their doors to social business, although they had initially said that it did not fit in their boxes. Governments, too, are getting engaged.”
She cited the invitation from the government of Sweden to solve the country’s nagging unemployment problem.

“Social business is such a fundamental concept — it is not just for international development or poor countries. It is something that addresses any social ills.”

Bruysten, who helped the EU Commission’s expert group on social business and has assisted Prof Yunus on UN Secretary General Ban Ki-Moon’s MDG Advocacy Group, said they are introducing crowd funding, a concept which allows people with even $25 dollars to invest to set up a business.

The German said their goal is to reach a target when none would ask what social business is, and is very optimistic about achieving it. “The African Development Bank has invited the Yunus Social Business to come to Africa. That is a whole new continent we have not tapped.”

Meanwhile, Larry Reed, director of Microcredit Summit Campaign, a US-based organisation that promotes microfinance, said: “If I were a Bangladeshi, I would have been very proud to know that something that has been created in my country is now taking hold worldwide.”

Social business, he says, taps the desire that many people have to invest in the world’s problems and see it become a better place to live. “It provides a vehicle for people to do something.”

He said the West, which is grappling with its own problems, is also looking towards the concept conceived by Prof Yunus. “It is not just for developing countries — there are also poor people in the West.”

About keeping social businesses ethical, the anti-poverty campaigner called for some set rules and guidelines and transparency reporting system for the purpose of evaluation.
“People would then be able to back up their claims that they are doing something for the society with numbers.”

He also touched upon the current situation at the microcredit industry, where the total number of clients has gone down globally for the first time since 1997.

“The drop is largely because of the crisis in the Indian state of Andhra Pradesh. There is also slow growth in Bangladesh and some other countries.”

He said the number of clients is growing tremendously in Sub-Saharan Africa, and tipped the continent to be “the next big destination” for microcredit. “In fact, the highest growth in clients last year took place there,” he added.

About the Grameen Bank issue, Reed said: “It is a tragedy to see that the government is trying to step in and take over something that has been very successful. It is a wrong approach.”
“We have seen worldwide that when governments tried to run microfinance programmes they failed. It is because people do not pay the money back and the money does not go to the poor.”

“I think it is very important to recognise that the owners of Grameen Bank are the women who invested their money. No government should try to take away what the poor people have worked so hard to gain for themselves — that is just not an appropriate thing for a government to do.”

Source: The Daily Star
Published on: 30th June, 2013

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