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Social business...... A RATIONAL APPROACH?

In my last blog, I wrote about the disparities existing in our country and proposed a solution for the backward India by promoting Micro Finance, following the concept of Grameen banks and socialBusiness.

I thank everyone for devoting their time to my blog and sharing your opinions. In this blog, I will discuss about the concept of social business, Grameen Banks and will analyze the views portrayed by Noble Laureate Md. Yunus when he came to India to deliver a lecture at the parliament of India.         

As discussed earlier in my blog about the raging disparity in our country, what could be an effective solution to this problem? Anyone would suggest to develop these backward areas, but the key questions remains the same-how? Government plans have failed to make a significant impact in these areas due to various reasons, some of them being corruption and in effective administration. A new approach needs to be adopted. I think in case of government developing the life of these peoples why not give these peoples a chance to develop themselves and government may act as guardian just to check any malfunction.  “Social business is can be casually assumed as a business in which neither loss is suffered nor gain.” The investor always gets his capital back and in dividend enjoys the fruits gained by performing his social obligations.  In delivering the lecture at the parliament of India Md. Yunus identified the two main questions which  decides the fate of the social business theory. Any person reading about social business will think two questions:

·         Who would like to establish a company to achieve social goals rather than make profit?

·         Who would provide for the funds for setting up such a business which in this capitalist world will be perceived as irrational and impractical?

There are many institutions in the world who works for social cause. Apart from this the government itself can be an investor. Mr. Yunus laid emphasis on the importance of social business. There are many charitable institutions in the country, but the money from charity depends upon donations so it’s one way, social business is the tool to empower these charitable institutions to stand on their feet.

To generate income or to employ different techniques to become self sufficient institutions, but not a commercial profit making institution. The concept of social business is being followed all over in the world including our neighbor Bangladesh. In Bangladesh, practical approach of social business can be seen. Mr. Yunus has been able to tie up with many multinational companies. A French dairy company called “Danone” is working in partnership with Grameen bank as “Grameen-Danone” with the aim to reduce the malnutrition among the children. The company produces “Yoghurt” at extremely affordable prices for the poor section of Bangladesh and it is rich in all nutrients which is required by a normal child.  The owners of the company are self committed not to generate profit over their actual investment and the surplus profit is used to make the product more efficient and in other development plans of the company. The target of the company is not to make profit but to increase its market to such an extent as more number of children can be benefited.

Similarly a French water company veolia is working in partnership to provide safe drinking water in villages of Bangladesh. They have incorporated giants like Intel to form Grameen –Intel which works in improving "IT" in rural sector and improving health services and perhaps the most unique collaboration is with "adidas" Grameen-adidas which makes affordable shoes for every section of people in Bangladesh and their aim is to ensure that no one in Bangladesh walks without shoes.

These are some examples of social Business in real life. Multi corporate giants have blended themselves in the nobility of social obligations and the best thing is no one is at loss.

If Bangladesh can do it surely this concept can be applied in most backward states of country.

Comments and suggestion are heartily appreciated and invited.


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