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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
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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 for partners
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 DevelopmentStrategies • 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 Partners for 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.