What can microfinance take from social business?

Jean Luc Perron of Grameen Credit Agricole says that there are thousands of potential social businesses, in developed as well as developing countries. Access to health, energy, education: in every field it is possible to envision a social business way to address an issue.

The first approach is to give people accesss to goods and services they dont have.

the next is to focus on ‘inclusive value chain’; so increased profits go back into the local communities.

So what types of SB are there? There are different ones, depending on who is the main shareholder, stakeholder in the business. For example, a large company takes the initiative – like Danone with its high-nutrient yoghurt in Bangladesh – and is then joined with partners to make a SB.

Or it can begin as an NGO, which then realises it can instead provide services as a company, ploughing profits back into the enterprise.

The third model is where the initiative belongs to a local entrepreneur, who needs capital, technical support etc.

In our view, a social business fund in this case is their for support, but does not interfere with the entrepreneur him/her self.

Who funds a social business? There is a large variety of sources of funding. They include government, NGOs/foundations, high net work individuals – which opens up venture philanthropy opportunities – and in effect, we are then talking about ‘blended’ finance…and approaching investors depends on who it is, and the level of underlying information they have.