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The Business of Social Change
Imagine a stockholder meeting in which the investors are
demanding higher returns and a more nimble response to changing
market realities. Except in this scenario, the returns they want
are measured by the number of lives improved, a decrease in the
number of poor people in their market, or the increased quality
of the environment around them. That exact scenario is happening
across the globe, spurred by a business plan designed by Nobel
Laureate Muhammad Yunus.
In his new book, Creating a
World without Poverty, Yunus gives a compelling account of
the successful launches of social businesses. These businesses,
while structured the same as traditional businesses, have two
significant difference: all profits are reinvested into the
business and used to advance the company's mission, and the
mission is to provide a product or service that improves the
lives and opportunities of poor people.
Franck Riboud, CEO of Group
Danone first learned of this concept over lunch with
Muhammad Yunus in October 2005. Almost immediately, plans were
in place to create the first ever purposely designed social
business, Grameen-Danone. Tasked with a mission to improve the
nutrition of poor children in Bangladesh, today it is a thriving
business, providing jobs to local entrepreneurs who supply the
raw materials, work in the factories, and deliver fresh yogurt
to stores. And, the product they supply is an inexpensive,
tasty, highly nutritious product loved by Bangladeshi children.
All profits are reinvested into the company with the purpose of
expanding to more villages.
Yunus has also applied his social business model to
healthcare, through Grameen Health Care Services, which will set
up eye care hospitals throughout rural Bangladesh. The first eye
care hospital is scheduled to open next March and is expected to
serve 50,000 people annually. We hope these success stories will
inspire you, as they did us, to take a closer look at social
business.
In the coming days, we will be launching a blog, where you
can discuss social business with others in the microfinance,
business, education and nonprofit industries. We also encourage
you to visit the Creating a
World Without Poverty section of our Web site, where you can
read reviews, listen to and watch media appearances, buy the
book, or share your thoughts with Muhammad Yunus.
Social Business Model Can be Applied Throughout the
World
Yunus' concept has already inspired Grameen Foundation to
launch Grameen-Jameel
Pan Arab Microfinance Limited and Grameen
Capital India, social businesses that fight poverty in the
Arab World and India, respectively. Their stories are very
different, but the concept is still the same-use a traditional
business model to fulfill a social mission.
Grameen Capital India Limited
Launches 
India's rapidly expanding microfinance industry got a
much-needed boost with the launch of Grameen Capital India (GCI)
Limited on January 14. A collaboration of Grameen Foundation,
IFMR Trust and Citicorp Finance
(India), GCI will help Indian microfinance institutions
(MFIs) tap local capital markets for funding. Fewer than 10
percent of the 75 million households in India that could benefit
from microfinance have access to services, and a lack of capital
is the major factor in the supply and demand imbalance.
Grameen Capital India is the first purposely-designed social
business company to promote microfinance as an attractive "asset
class" by enabling access to the capital markets. This will help
microfinance institutions (MFIs) access lower-cost funds through
appropriate financial structures while integrating them into the
formal financial markets in India.
In Creating a
World Without Poverty, Professor Muhammad Yunus noted the
problems facing MFIs, saying "there is plenty of money in any
country to lend money to the poor. It is all a question of
mobilizing it and making it available to the poor." He pointed
to GCI as a unique "social business" that will facilitate access
to local capital markets for Indian MFIs .
Grameen Foundation has been supporting microfinance in India
for more than five years, and we believe Grameen Capital India
is another step in helping the poor in India lift themselves out
of poverty by giving MFIs the tools for accessing the
sophisticated financing they need to grow and reach more of
India's poor.
MIX Global 100 Rank
GF Microfinance Partners for Excellence
Grameen Koota founder and CEO Vinatha Reddy accepts the
Pioneer in Microfinance award.
| Grameen Foundation is proud to
congratulate its microfinance partners for ranking amongst Forbes Magazine's Top 50 and MIX
Global 100 Microfinance Institutions.
Forbes Magazine's first-ever list of the World's
Top 50 Microfinance Institutions selected from a field of
641 micro-credit providers ranked Grameen Foundation partners
FONDEP as #5, ACSI as #6 and Grameen Koota as #19 using scale,
efficiency, portfolio risk, and profitability as assessment
tools. ACSI and Grameen Koota were honored by GF last year, with
ACSI earning the Excellence award and Grameen Koota recognized
with the Pioneer in Microfinance award.
Other GF partners and guaranteed growth partners included in the list were:
- Foundation Zakoura: 27
- DBACD: 28
- Kashf Foundation: 34
- enda inter-arabe: 36
- SKS: 44
- Pro Mujer Peru: 46
The MIX Global 100 of top microfinance institutes in the
world was selected from the evaluation of 820 microfinance
institutions across the globe using profitability, transparency,
efficiency and outreach as assessment tools. Grameen Foundation Growth Guarantee Partner Foundation Zakoura received the #1 ranking.
Three Grameen Foundation partners ranked in the top 25. Grameen Foundation
partners ESAF was ranked as #8, SHARE as #21 and Kashf as #22.
GF honored SHARE in 2000 with the Excellence award and Kashf in
2002 with its Pioneer in Microfinance award. Other GF partners and guaranteed growth partners included in the list were:
- enda inter-arabe: 30
- CARD NGO: 32
- FONDEP: 52
- Pro Mujer Bolivia: 57
- SAT: 59
- SKS: 64
- NWTF: 66
- EDPYME Cofianza: 67
- Al Tadamun: 74
- ProMujer Peru: 76
- LAPO: 82
We are constantly striving to fight global poverty through
our partnerships with microfinance institutions by connecting
them to the capital and innovative business tools they need to
grow. This recognition by Forbes and the Mix underscores
our partners' commitment to serving their clients efficiently
and effectively while increasing their outreach and
sustainability.
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