Social Business

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Social Business * Tahmid Md. Istiaq Arman Social Business was first defined by Nobel Peace Prize winner Prof. Muhammad Yunus, as a non-dividend company that is created to address and solve a social problem. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. The purpose of the investment is purely to achieve one or more social objectives through the operation of the company. No personal gain is desired by the investors. The company must cover all costs and be financially sustainable, while achieving the social objective in sectors such as healthcare, education, poverty, environment, housing, climate urgency etc. Once the original investment has been recouped by the investors, profit stays within the company to expand its outreach and increase the social impact. (http://en.wikipedia.org/wiki/Social_business)
Professor Muhammad Yunus has divided Social Business into two categories in his book Creating a World without Poverty—Social Business and the Future of Capitalism:
Type I Social Business focuses on businesses dealing with social objectives only. E.g.: The product produced is for the benefit of the poor or targeted to solve a specific social problem. Grameen-Danone is an example of Type I social business. The Shokti Doi yogurt produced in the plant in Bogra, Bangladesh, is fortified with micronutrients that are missing in the poor children and it is targeted to fight malnutrition. If malnourished children eat two cups of Shokti Doi per week for approximately 8-10 months, they grow healthy.
Type II Social Business is a profit-oriented business that is owned by the poor or other underprivileged parts of the society, who can gain through receiving direct dividends or by indirect benefits. Grameen Bank, being owned by the poor, is the prime example of this type, although it would also classify as a Type I social business.
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