Social Business in developing countries - a new solution to eradicate poverty?Presentation Transcript
Social Business in Developing Countries
A New Solution for Eradicating Poverty?
Dr. Linda Kleemann
The plan for today
… in developing
… eradicate poverty?
Social Business in developing countries
The Pioneer I
1976 first time to lend money
1983 Grameen Bank
2006 Nobel prize
2011 6.2 Mio. people in 2.5 Mio.
groups, 97 % women, 8.7 Mia. US$
Today: Grameen group
The bank: owned 95% by customers,
What makes the Grameen Bank a Social
o Social Business Type 2
Owned by target group
Dividends are ok
The Pioneer II: Grameen – Danone Joint
o Social Business Type 1
Business produces products or services for the „poor“
Main aim of business is social (or ecological)
No dividends, profits stay in the business
A new idea?
o 12th century: model „Ehrbarer Kaufmann“ is born.
o 1521 Jakob Fugger creates „Fuggerei“.
o 1799 Robert Owen founds the cooperative movement
o 1853 Florence Nightingale develops the first modern hospital
o 1864 Friedrich Wilhelm von Raiffeisen founds the first
o 1959 the first alternative trade society starts in the Netherlands,
1967 the first in Germany
Summary Social Business
o Business with a social mission
o Business case: products or services are sold
o Success is defined by social goal
o Financial return stays in the firm (type 1) or firm is owned by the
poor/the target group (type 2)
Social Business in developing countries
The starting point I
50 years of development aid without results?
Aid effectiveness debate and evaluation hype
Social Vision: improving social and economic welfare of smallscale farmers
and landless in Zimbabwe
Starting point for business: product quality achieved by smallholders is lower
than by commercial producers
Focus: product and process quality in organic farming
Social Investment instead of project basis brings long term engagement for
land and people
Break Even after 6-7 years
After that: financing of social-only activities through profits
Vision: improving the social and economic living standards of small-scale
farmers and landless people in Zimbabwe
Org., UEBT, FAIR
Investment in production:
Wild collection of indiginous plants
Processing of wild aromatic plants in the communities
Sustainably wild collected Strafantus
Processing of Strafantus by Small scale farmers / wild collectors
Construction of wood saving stoves
The KAITE team says:
Visit KAITE in Zimbabwe
You will see the difference!
Starting point II
Business Opportunities at the Bottom of the Pyramid: a lot of
potential new customers
A second example
Welcome to Blue Skies
About Blue Skies
• Founded in 1997.
• Producers of fresh-cut fruit and freshly
• Employ 2,745 people in factories in
Ghana (2), Egypt, South Africa, Brazil, UK
• Committed to value-adding at source
• Supply 13 major European retailers.
• Presented with Queens Award for
Sustainable Development in 2008 and
deciduous and exotic
Processing deciduous and
some sub tropical fruits
SOUTH AFRICA: Processing
deciduous and sub tropical
West African Challenges
SOCIAL & ECONOMIC
•Agriculture, land and the mind-set.
•Industry and Exports.
•Climate change and fruits
•Energy and airfreight
•“Sand winning” and urbanization
The Blue Skies Solution
• for meeting consumer demand and crushing
Encouragement for involvement in agriculture and
industry. Role models, rewards and
Joint Effort Enterprise
Employing people from
because we believe that
we will generate better
ideas if we have a diverse
range of skills, experience
because we believe that if
we respect each other for
who we are, then we will
feel happier about our work
and proud to do a good
This is our culture.
Operating profitably and
because we know that we
cannot continue to produce
the best fruit products in the
world unless we generate
the funds that will enable us
to survive and grow.
• Our Blue Print for Sustainability
• Taking responsibility
Demonstration farms > focus on quality
Education and awareness > mind-set
• Developing more value added products
Blue Skies Foundation
• Partnership between Blue Skies, Albert
Heijn and Waitrose
• €170,000 per year for community
• Intended to improve the lives of farmers
and their communities who supply Blue
Skies and our staff.
• Projects focused on improving education
• Comprehensive project selection and
A step at a time…
Our ideals embrace the ideas
of differentiation and quality.
Fresh From Harvest
More value-adding at source
will change fortunes faster for
Africa is the future
o No social security systems, often
weak governments >> many
o Poverty >> who pays for your
o Political and legal insecurity >>
o No support system for start-ups
o Donors >> help or competition?
o Often started by local or
o A social aim does not mean
it is less risky
o Time to break even longer
than in „normal“ businesses
o Difference to development
aid: impact through
What are the others doing?
issue to be
Develop a novel
solution for this
Do the next
combine social and
1) The big guys
o Mpesa Kenya: Safaricom/
o Other examples of big
Barclays Bank (Ghana),
Bosch & Siemens home
appliances (Indonesien / Philippinen), Manila Water Company
o “Inclusive business integrates people living in poverty into the
value chain as consumers or producers, thus making a positive
contribution to the development of companies, the local
population and the environment.” (Gradl, Knobloch 2012)
o Known world wide through the World Business Council for
Sustainable Development (WBCSD), SNV and UNDP
Other names for inclusive business
2) Classical examples
o BASF: reducing emissions by 10% (air) and 40% (water) until 2012.
o „Seitenwechsel“: managers work in a charity for one week.
The concept of shared value includes rules and practices that increase
both the competitiveness of a company and improve the economic and
social conditions of the community the company works in. (Porter and
3) Classical examples
o OTTO: „Code of Conduct“ on social standards for their suppliers.
o Deutsche Post World Net: logistical support for emergencies
o HSH Nordbank Run: running to support children in need.
Corporate Social Responsibility
„Corporate Social Responsibility (CSR) means that companies or
other organisations or institutions take societal responsibility
voluntarily, and above their legal obligations.“ (Bundesministerium
für Arbeit und Soziales)
„CSR is a system which serves as a basis for companies to voluntarily
integrate social and environmental concerns into their activities
and their relations with their Stakeholders.“ (EU)
Overview of related concepts
Imagine that you work at the tax office. You have to decide how to tax an
organisation. If an organisation has a social purpose it can profit from a
reduced tax rate. There are three categories*:
• Normal rate of 20% (profit maximising company)
• Reduced rate of 7%
• Charitable rate of 0%
Which rate would you charge the following organisations?
*rates are hypothetical and do not correspond to real rates.
Fairtrade is an alternative approach to conventional trade and is based on a partnership
between producers and consumers. Fairtrade offers producers a better deal and
improved terms of trade. This allows them the opportunity to improve their lives and
plan for their future. Fairtrade offers consumers a powerful way to reduce poverty
through their every day shopping.
When a product carries the Fairtrade Mark it means the producers and traders have met
Fairtrade standards. The standards are designed to address the imbalance of power in
trading relationships, unstable markets and the injustices of conventional trade.
Nestlé is the world's leading nutrition, health and wellness company. Our mission of "Good Food,
Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of
food and beverage categories and eating occasions, from morning to night.
„Nestlé Ghana wins award for sports
development in schools„
We design for impact: In a country where 70% of the population depends on agriculture,
improvements in farming technology and techniques - and the credit to access them - are vital to
improving living conditions and ending poverty.
Proximity Designs works to increase the productivity and incomes of rural households in Myanmar
by designing and selling simple, highly efficient agricultural products. Proximity has developed an
extensive distribution network in order to reach the most isolated customers.
SEKEM was founded with the idea of sustainable development and giving
back to the community. The vision that brought Dr. Ibrahim Abouleish to
dig the first well in the vast desert land still resounds in SEKEM’s approach
of conducting business. Like a compass, our vision, mission and values
guide us in the everyday work in all SEKEM companies.
The SEKEM Initiative established several specialized companies to ensure
productions and marketing of its products.
Since May 2007 the German GLS Gemeinschaftsbank and the Dutch
Triodos Bank are shareholders of the SEKEM Holding and support the
finance for future investments.
SEKEM Companies: ISIS: Produce & Foodstuffs, ATOS: Herbal Medicine,
NATURETEX: Textiles, SEKEM Europe, LOTUS: Herbs & Spices, LIBRA: Cattle
& Compost, MIZAN: Seedlings, PREDATORS: Biocontrol, SEKEM for Land
Reclamation, SEKEM Holding
Creating a better future every day
We aim to provide people the world over with products that are good for them and
good for others.
We will develop new ways of doing business with the aim of doubling the size of our
company while reducing our environmental impact.
No matter who you are,
or where in the world
you are, the chances
are that our products
are a familiar part of
your daily routine.
Every day, around the
world, people reach for
Unilever products. Our
brands are trusted
everywhere and, by
listening to the people
who buy them, we've
grown into one of the
world's most successful
companies. In fact, 150
million times a day,
chooses a Unilever
Grameen Veolia Water has set up a
water treatment plant to provide safe
drinking water to people living
in villages in rural Bangladesh. The
project aims to provide 100,000
people with drinking water that meets
the highest WHO standards, at a tariff
they can afford.
The project means that local people
finally have access to drinking water
that doesn’t make them ill.
Grameen Veolia Water works in
partnership with some of the world’s
leading companies and academic
institutions to invent a new economic
model to bring drinking water to rural
VisionSpring has developed several innovative models for bringing high-quality, affordable
eyeglasses to customers in developing countries. Through mobile optical units, optical shops, and
Vision Entrepreneurs, more than 600,000 pairs of eyeglasses have been sold.
The Waitrose Way:
Waitrose believes in championing British produce, treading lightly on the environment, supporting
responsible sourcing and treating people fairly.
In recognition of the work that we do, Waitrose has received a Big Tick Award in the Sustainable
Supply Chain category at the Responsible Business Awards 2013.
John Lewis Partnership:
We’re not owned by shareholders and the City. Instead, we’re owned by everyone who works for
the Partnership, which is why we’re all on the same mission to bring you the best.