Social businesses aim to solve social problems through sustainable commercial enterprises. Grameen Danone Foods Ltd. produces fortified yogurt in Bangladesh to address malnutrition. It sells yogurt at affordable prices in rural areas, benefiting children's nutrition. The company also generates employment. Grameen Veolia Water Ltd provides treated water to rural communities, increasing access to safe drinking water. Both social businesses contribute to the UN's Sustainable Development Goals of ending hunger and increasing access to water, while also creating jobs. Social businesses offer a sustainable model to address social issues through for-profit solutions.

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Social Businesses to solve social problems in rural Bangladesh
Prepared by
Md Rokunuzzaman
Master Student
Graduate School for International
Development and Cooperation (IDEC)
Hiroshima University, Japan

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Introduction
Twenty-first century is marked by the rise of global economy. Despite that, there are
many social, economic and environmental problems viz. poverty, hunger, illiteracy, lack
of treatments, inequalities, climate change etc. in the world. To address global issues all
193 member states of United Nations agreed `The Sustainable Development
Goals (SDGs)` in 2015, consisting of 17 global goals and 169 targets to be achieved by
2030. The SDGs is a continuation of the Millennium Development Goals (MDGs),
which had been implemented globally during 2000 to 2015 period.
Like other developing countries, government of Bangladesh, national and international
organizations, development partners and non-government organizations are working to
combat socioeconomic problems in Bangladesh. Nobel peace prize laureate Professor
Muhammad Yunus pioneered a business model namely social business to solve social
problem. He described the concept of social business model in his book `Creating a
World Without Poverty: Social Business and the Future of Capitalism` published in
2007. Some international business and social organizations like Danone S.A., Veolia
Water Limited, UNIQLO, and Green Children Foundation have established social
business in Bangladesh with the collaboration of Grameen Health Care Services and
Grameen Bank of Bangladesh. This study aims to review the mode of operation of
social businesses and its impact on solving problem in Bangladesh, especially, Grameen
Danone Food Limited to solve malnutrition nutrition problem in Bangladesh.
What is a business?
Business is a usual commercial or mercantile activity customarily engaged in as a
means of livelihood and typically involving some independence of judgement and

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power of decision. Business may also be defined as as a commercial or industrial
enterprise having transaction, dealing; buying and selling goods and/or services. (Gove,
(Ed.),1986, Webster's Third New International Dictionary)
According to Investpedia (New York based investing and finance education website):
Business is defined as an organization or enterprising entity engaged in
commercial, industrial, or professional activities. The term business also refers
to the organized efforts and activities of individuals to produce and sell goods
and services for profit. Businesses range in scale from a sole proprietorship to an
international corporation.
What is a Social Business?
Social Business is a business concept pioneered by Professor Dr. Muhammad Yunus:
Founder of Grameen Bank (Village Bank), awarded Novel Peace Prize in 2006 along
with his Founded Grameen Bank.
Social Business is designed and operated as a business enterprise with products,
services, customers, markets, expenses, and revenues having social mission at its core.
Dedicated to solving social problems by providing essential products and services like
healthcare, safe water or clean energy to the poor (Yunus & Weber, 2007).
Social Business can be characterized by the following properties:
✓ A self-sustainable enterprise that sells goods or services; generates profit and
aims to be financially self-sustaining.
✓ The investors never receive dividends but could recoup invested amount if they
desire.

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✓ Profit could be either reinvested to expand the business or passed on to target
groups by lowering the price of products or services (Yunus & Weber, 2007)
Non-profit Organization
Non-profit organizations have different kinds. Private and public charity, philanthropic
foundation, benevolent society, religious missionary, nongovernment organization and
not-for-profit organization are well known among them. Non-profit organization usually
depends on donation money for its sustaining.

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Figure 1: Comparison among social business, not for profit organization and profit
maximizing business (Source: Yunus, 2010)
N/A
In the figure 1, two upper quadrants represent financial profit maximizing business and
lower two quadrants represent social profit maximizing business. On the other hand, left
two quadrants represents not self-sustaining business and two right quadrants represent
self-sustaining business. Social businesses fall in social profit maximizing and self-
sustaining domain. Whereas, profit maximizing businesses fall in self-sustaining but
financial profit maximizing domain and not for profit organizations fall in social profit
maximizing but not self-sustaining domain.
Profit maximizing
Businesses
Social
Businesses
Not for profit
organization
Financial profit maximization
Repayment of
invested capital
(Self sustainability
Social profit maximization
No recovery of
invested capital

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Why Social Business?
Free market economy has opened windows for business. Globally business is thriving
through remarkable technological innovation and scientific discovery and bringing
prosperity to human being. Business also has huge potentials to contribute to solve
social problems if business is considered as a means of solving social problems.
On the other hand, donation and charity have great contribution for serving immediate
need, especially in case of emergency like natural disasters, when people need
immediate helps. However, to solve existing social problems like poverty, illiteracy,
lack of affordable and quality health service, malnutrition, environmental pollution etc.,
social business model could be a better option. Limitation of the donation money is that
donation money has only one life, in a sense that it is used only one time, does not
recycle in terms of further benefit to its beneficiaries. Conversely, social business
money has endless life in a way that money is invested in a social business, produces
social goods or services, generate revenue, revenue is reinvested, run the business
continuously and produces social goods and services. Consequently, social businesses
don’t need to depend on donation for its continuation. On the other hand, in case of
usual non-profit organization or charity, when donation fund falls short, the good works
stop accordingly (Yunus & Weber, 2007).
Kinds of social business
Social business could be two type, one type of social business produces social goods
and services to help the poor, produces social benefit in terms of the products, services
or operating system of the business. Grameen Danone Food Limited, Grameen Veolia

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water and Grameen GC Eye Hospitals, are some the example of this kind of social
business, where products viz. fortified yogurt and water and service (eye treatment) are
provided to the poor by affordable prices.
The Second type of social business does not create social benefit directly from the
goods or services its produced. However, social benefit is created by distributing the
financial benefit generated by the business operations to the poor and disadvantaged
group. Grameen UNIQLO is an example of second type of the business. Grameen
UNIQLO products (retailing of clothing) does not benefit the poor directly, but the
profit generated by the company is reinvested to expand the business as well as are
donated to charity.
Who invest in social business?
Generous individuals, national and international organizations or government agencies
would invest in social business. The motivations that lead people to create foundations;
to donate to charities, non-profit organizations, and non-government organizations;
devote time to volunteer activities would lead many to invest their money and time in
social business. Social business has one distinguishing characteristics in terms of
ownership of the business, in social business the investors or donors become the owner
of the business and remain the owner of the business even after recouping their invested
money and could run the business according to the objectives of the business.

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Social businesses in Bangladesh
Grameen Danone Food Ltd. Grameen Danone is the first international joint venture
Social Business Enterprise in the world. Grameen Danone is a collaboration of France
based multinational food products company Danone S. A. and Grameen Health Care
Services Limited. Grameen Danone started producing fortified yogurt from 2007
through its own factory established in Bogura District of Bangladesh. Social objectives
of the business are (a) selling of fortified food at affordable price for rural impoverished
children and (b) generation of employment. (Yunus & Weber, 2007; & Yasmin, 2016).
Grameen Veolia Water Limited: In partnership with France based water services
company Veolia Water Limited, Grameen Health Care Services Limited formed a social
business as Grameen Veolia Water Limited in 2008. The company established its first
water treatment plant with a network of 11 standpipes (water collection booth) in 2009,
in Goalmari union (rural local government unit) of Comilla district of Bangladesh. The
current market consists of the 20,000 to 25,000 inhabitants of the Goalmari area. Water
form Meghna river is treated and sold among the local population at affordable price.
This treated water is suitable for drinking and cooking and complying with WHO
standards. To make the company self-sustaining caned water is sold at regular prices to
different offices situated in Dhaka city. Social objectives of the business are (a)
elimination of water borne diseases and Arsenic poising prevailing in disadvantaged
rural area of Bangladesh and (b) generation of employment (source: Grameen Health
Care Service Ltd. website & Grameen Veolia website).

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Grameen GC Eye Hospitals: Grameen Health Care Service Ltd. Bangladesh and The
Green Children (GC) Foundation, USA have jointly established three eye hospitals in
Bangladesh until December 2019. First Grameen GC Eye Hospital was established in
Bogura district of Bangladesh in 2007, second Grameen GC Eye Hospital was
established in Rupatoli, Barisal in 2009, and third one was established in Thakurgaon
district in 2013. These eye hospitals have been providing quality and affordable eye
treatment especially cataract operation since their establishment. These eye hospitals
Charges patients according to their ability to pay. Social impacts of these hospitals are
(a) preventing blindness especially in rural area of Bangladesh, and (b) generating
employment (source: Grameen Health Care Service Ltd. website).
Grameen UNIQLO: Grameen UNIQLO is a social business company in Bangladesh
established in 2011. Japan based Fast Retailing Co., Ltd. (commonly known as
UNIQLO) and Grameen Bank jointly established Grameen UNIQLO, a clothing
retailing company produced and sells all its clothing in Bangladesh. As of January
2020, Grameen UNIQLO has 17 outlets around the country. Grameen UNIQLO
generate profit to invest in social business to solve social problems in Bangladesh.
(Grameen UNIQLO website)

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Social problem (malnutrition) in Bangladesh
Bangladesh is a country with a population of about 162 million (World Bank, 2018).
Total land area are 147,570 square kilometres, one of the densely populated country in
the world. Poverty rate in Bangladesh is 24.3% (Bangladesh Bureau of Statistics, 2018).
Due to prevalence of poverty malnutrition is a problem in Bangladesh. According to
Bangladesh Demographic and Health Survey 2017-18 by National Institute of
Population Research and Training (NIPORT):
➢ From 6 months to 18 years old population in Bangladesh are about 60 million
➢ Under 5 years (from 6 months to 59 months) old children are nearly 15 million
➢ 31% of children under five years of age are stunted (low height compares to age
of the children).
➢ 8% of children under five years of age are wasted (low weight compares to
height of the children).
➢ 22% of children under five years of age are underweight (low weight compares
to age of the children).
• Grameen Danone Food Ltd. popularly known as Grameen Danone is a Social
Enterprise (SE) founded by Danone and Grameen Bank as a 50-50 joint venture
in 2007 (Yunus et al., 2010).
Contribution of Grameen Danone
Grameen Danone manufactures and distributes a fortified yogurt called `Shokti+ Doi'
(yogurt for power) which has been designed to provide children with many of the key
nutrients (proteins, vitamins, Iron, Calcium, Zinc etc.) that are typically missing from

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their diet in rural Bangladesh. Currently Grameen Danone is producing and selling
100,000 cups of yogurt daily. Yogurts are sold at low price (10 BDT/50 ml Pouch) in
the rural disadvantaged areas. Company also sell yogurt in urban and city market at
regular price (40 BDT/80 ml Pouch). 80% of the company profit comes from urban
sales. A single 50 ml cup of yogurt provides 30% of a child`s daily requirement of
vitamin A, Iron, Zinc and Iodine.
On the other hand, employment is generated in production, inputs supply and marketing
level of the products. Around 500 farmers are living better by selling their milk to
Grameen Danone regularly. 250 women micro-entrepreneurs (Grameen ladies) are
earning extra money by selling yogurt either door to door or delivering yogurt over the
counter of local grocery shops (Source: Danone communities’ website).
Connections of social business with SDGs
Grameen Danone is contributing partially to the goal 2 to of the SDGs by providing
nutritious food to disadvantaged children at affordable price.
Goal 2. End hunger achieves food security and improved nutrition and promotes
sustainable Agriculture.
Targets:
✓ By 2030, end hunger and ensure access by all people, in particular, the poor and
people in vulnerable situations, including infants, to safe, nutritious and
sufficient food all year round.

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✓ By 2030, end all forms of malnutrition, including achieving, by 2025, the
internationally agreed targets on stunting and wasting in children under 5 years
of age and address the nutritional needs of adolescent girls, pregnant and
lactating women and older persons.
Grameen Veolia water is contributing to increase access to safe and affordable
drinking water that aligned with the targets of goal 6 of SDGs.
Goal 6: Ensure availability and sustainable management of water and sanitation
for all
✓ By 2030, achieve universal and equitable access to safe and affordable drinking
water for all
Social business also generating employemnt in bangladesh and contributing to goal 8 of
SGDs
Goal 8: Promote sustained, inclusive and sustainable economic growth, full and
productive employment and decent work for all
✓ Achieve higher levels of economic productivity through diversification,
technological upgrading and innovation, including through a focus on high
value added and labour-intensive sectors
✓ By 2020, substantially reduce the proportion of youth not in employment,
education or training
Conclusion:
From the above discussions, it is perceived that social business could be a good
option to address social problems.

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References
Bangladesh Bureau of Statistics (2018). Household Income and Expenditure Survey
(HIES)-2016. Bangladesh Bureau of Statistics: Dhaka.
http://www.bbs.gov.bd/site/page/b588b454-0f88-4679-bf20-90e06dc1d10b/-
Danone Communities , Retrieved from
http://www.danonecommunities.com/index.php/portfolio_page/grameen-
damone-food-limited/
Definition of Business, Investpedia website.
https://www.investopedia.com/terms/b/business.asp
Gove, P. B. (Ed.). (1986). Webster's Third New International Dictionary.
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https://grameenhealthcareservices.org/index.php?option=com_content&view=ar
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mission
Grameen Veolia website. Retrieved from http://www.grameen.veolia.com.bd/
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