Social Entrepreneurship: An Asian Perspective

Prof. Marie Lisa M. Dacanay

Asian Institute of Management

Civil Society Forum, IMF-WB Annual Meeting

14 Sept 2006

Social Entrepreneurship (SE): An Asian Perspective Context of presentation A look at some SE initiatives in Asia Understanding SE in Asia Challenges and proposals for

advancing SE in Asia Harnessing SE for the MDGs in

Asia

Context: AIM-CAFO Partnership in Social Entrepreneurship Research (AIM/CAFO)

Cases on significant practices Creating a Space in the Market (2004)

Education (AIM) Degree and non-degree programs Master in Entrepreneurship for Social and

Development Entrepreneurs or MESODEV Networking and Outreach (AIM/CAFO)

International Workshop on Social Entrepreneurship in Asia (July 6-8, 2006)

A Look at Some SE Initiatives in Asia

KOOL-NE (Philippines) Hagar (Cambodia) PEKERTI (Indonesia) Basix Group (India) Partners for Health (Thailand)

A Look at Some SE Initiatives in Asia: KOOL-NE (Philippines)

Started 2002 Joint venture between

PRRM (NGO) & KALIKASAN (farmers)

Production, processing and marketing of organic rice

Second largest producer-distributor in Luzon island

Farmers: increased incomes from lower cost of inputs and premium pricing

Also contributes to environmental health and soil rehabilitation

Total assets: US$110,000 Farmers’ equity: 10%; Annual sales: about USD91,000

A Look at Some SE Initiatives in Asia: Started as shelter for women by Pierre Tami in 1994 Mission: Prevention, rehabilitation and reintegration of

rural women and children who migrate to cities in search of better life.

Now a social enterprise system with non-profit arm providing initial education and vocational training and commercial enterprises that provide employment and additional vocational training to enable women to have independent and productive lives

Commercial enterprises: Hagar Soya, Hagar Catering, Hagar Design

Working with other shelters to expand in Southeast Asia

A Look at Some SE Initiatives in Asia:

Partners for Health (Thailand)

Social enterprise system serving persons living with HIV-AIDS (PLWHA): Health component with outreach care and psycho-

social support: managed by Thai Business Coalition on Aids (TBCA)

Income generating component providing marketing and retail support for PLWHA-made textile and handicrafts: managed by Center for People’s Families Affected by Aids (CPA) Positive Marketing Co. Ltd. (PMCL)

A Look at Some SE Initiative: Partners for Health (Thailand)

Set up as public-private-community

partnership project in Nov 2003; cost USD117T Partners: UNESCAP, Ministry of Public Health,

Bangkok Metropolitan Authority, TBCA and the CPA Objective: to increase outreach and effectiveness of

gov’t HIV-AIDS programs PMCL sales (2004) : USD203T, mainly serving events-

based market; 35% of profits go to health component Expected to be self-sustaining by 2008; By May 2005,

deemed successful for replication & scaling up

A Look at Some SE Initiatives in Asia: PEKERTI (Indonesia) Yayasan Pekerti (1975): not-for-profit foundation set

up by 5 NGO activists Mission: increase standard of living of marginalized

artisans & establish fair, democratic involvement in their economic activities; part of IFAT

Pekerti Nusantara (1979): commercial arm for export market (assets: USD389T by 2002)

Pekerti Cooperative (2000): working capital forpartners

A Look at Some SE Initiatives in Asia: PEKERTI (Indonesia)

APIKRI Partner of Pekerti composed of

200 artisans in Yogyakarta 1987-1990: Pekerti helped set up

Apikri Foundation and Apikri Cooperative

w/c now conduct self-sustaining development and trading activities

Sales by 2003: USD277 thousand

A Look at Some SE Initiatives in Asia: Basix Group (India)

Rural livelihood promotion institution founded in 1996 by NGO leaders

Bank and non-bank institutions providing livelihood financial services

Not-for-profit agency providing agriculture, business and institutional dev’t services

Clients: poor & employers of poor in agriculture, non-farm and allied sectors

A Look at Some SE Initiatives: Basix Group (India)

Targets large numbers of poor in economic subsectors with growth potential: dairy, cotton, rural retailing

Outreach (2003): 10,000 villages, 25 districts, 6 states Microfinance outreach: 145,500 Livelihood promotion services outreach: 22,000 Assets- USD9.2 million (2003); loan portfolio- USD 13

million with 97% on-time recovery rate Impact assessment (2001): 68% clients poor; 52%

with increased incomes (control group-29%); 37% with increased employment (control group-26%)

A Look at Some SE Initiatives in Asia: Basix Group (India)

SARVODAYA NANO FINANCE LTD Non-bank financial institution

set up by Basix to service self-help groups (SHGs) of poor women

July 2001: devolved ownership to community-based mutual benefit trusts of 5,000 SHGs of poor women in Tamil Nadu

3-year agreement for Basix to provide management services

Understanding SE in Asia Defining ‘social entrepreneur’ Social enterprise

vs traditional business enterprise Social enterprise development

strategies Micro and macro perspectives Differing macro contexts

Defining ‘social entrepreneur’ Development change agent working in the

market as an arena Innovative, opportunity-seeking, resourceful

person, group or institution Leads creation of enterprises, enterprise

systems or enterprise development programs demonstrating positive development impact

Social enterprise vs traditional business enterprise

Traditional business enterprise

Social enterprise

Stockholders or proprietors

Primary stakeholders/

beneficiaries

Marginalized sectors

Bottom line: profit Primary objectives Double or triple bottom line

Accumulative Enterprise philosophy

Distributive

Social enterprise vs traditional business enterpriseTraditional business enterprise

Social enterprise

Stockholders or proprietors: individuals, families who own capital and invest such in the enterprise

Primary stakeholders/

beneficiaries

A sector, community or group, usually involving the marginalized sectors of society who may or may not own/control the enterprise

Social enterprise vs traditional business enterprise

Traditional business enterprise

Social enterprise

Bottom line: profit

Primary objectives

Double or triple bottom line: financial viability; improve quality of life of marginalized sector; environmental sustainability

Social enterprisevs traditional business enterprise

Traditional business enterprise

Social enterprise

Accumulative: minimize costs, maximize profits to enrich individuals;

social and environmental costs externalized

Enterprise philosophy

Distributive: economic benefits distributed to a broader segment of society;

generate social and environmental benefits to society

Social Enterprise Development Strategies

Resource Mobilization Strategies Social Inclusion Strategies Intermediation Strategies Empowerment Strategies

Social Enterprise Development Strategies:Resource Mobilization Strategies Primary concern: generate income from

sale of products or services to finance development agency’s operations or core program

Exemplified in part by Partnersfor Health

Another example: Bina Swadaya Tours plus 8 other subsidiary companies provide 90% of Bina Swadaya’s annual budget of USD5million (Indonesia)

Social Enterprise Development Strategies: Social Inclusion Strategies

Address need for disadvantaged or excluded groups to regain their dignified place in society

Exemplified by Hagar and Partners for Health

Social Enterprise Development Strategies: Intermediation Strategies

Provides primary stakeholders access to economic or social services

Two types: functional intermediation and progressive intermediation

Variations of progressive intermediation exemplified by Pekerti and Basix

Example of functional intermediation: most MFIs

Social Enterprise Development Strategies: Empowerment Strategies Address need for poor or marginalized to reap

maximum benefits from owning and controlling social enterprise themselves

Two types: direct empowerment and devolutionary empowerment

Direct: exemplified by cooperatives

Devolutionary: exemplified by KOOL-NE

Social entrepreneurship:

micro and macro perspectives Micro perspective: art of wealth creation with

multiple bottom lines Macro perspective: strategy to democratize

market economies Participation by the poor and marginalized

sectors as owners, decision makers and stakeholders (social dimension)

Protection and rehabilitation of society’s life support system (environmental dimension)

Differing Macro Contexts of SE in Asia Developing market economies: POVERTY Socialist countries in transition to market

economies: humane market economies or ‘MINDFUL MARKETS’

Developed/affluent market economies: SOCIAL INCLUSION ++ assisting efforts at poverty reduction and building

‘mindful markets’ in other countries

Challenges in Advancing SE in Asia Social marketing: Lack of understanding by

development sector of market as arena for change Capacity building: Low capacity for building and

scaling up social enterprises among civil society actors

Scaling up and mainstreaming Lack of access to financial capital for scaling up Limited involvement of the business sector Absence of supportive policy environment

Concrete Proposals to Advance SE in Asia

Regional center for social entrepreneurship in Asia to support country level initiatives in response to challenges

Social enterprise capital fund (s)

Harnessing SE for the Millenium Development Goals (MDGs) in Asia MDBs may want to consider harnessing

social entrepreneurship to improve performance vis a vis the MDGs in Asia, home to 2/3 of the world’s poorest.

Proposal: Invest in a Social Enterprise Capital Fund to support innovative tri-sectoral partnerships and scale up existing initiatives directly responding to the MDGs.

Thank You!