Social Entrepreneurship: An Asian Perspective

1. Social Entrepreneurship: An Asian Perspective Prof. Marie Lisa M. Dacanay Asian Institute of Management Civil Society Forum, IMF-WB Annual Meeting 14 Sept 2006

2. 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

3. 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)

4. A Look at Some SE Initiatives in Asia • KOOL-NE (Philippines) • Hagar (Cambodia) • PEKERTI (Indonesia) • Basix Group (India) • Partners for Health (Thailand)

5. 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

6. 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

7. 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)

8. 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

9. 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 for partners

10. 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

11. 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

12. 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%)

13. 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

14. Understanding SE in Asia • Defining ‘social entrepreneur’ • Social enterprise vs traditional business enterprise • Social enterprise development strategies • Micro and macro perspectives • Differing macro contexts

15. 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

16. Social enterprise vs traditional business enterprise

17. Social enterprise vs traditional business enterprise

18. Social enterprise vs traditional business enterprise

19. Social enterprisevs traditional business enterprise

20. Social Enterprise DevelopmentStrategies • Resource Mobilization Strategies • Social Inclusion Strategies • Intermediation Strategies • Empowerment Strategies

21. 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 Partners for Health • Another example: Bina Swadaya Tours plus 8 other subsidiary companies provide 90% of Bina Swadaya’s annual budget of USD5million (Indonesia)

22. 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

23. 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

24. 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

25. 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)

26. 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

27. 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

28. 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)

29. 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.

30. Thank You!