On July 11, 2013, we hosted the Social Business Conference that attracted over 200 people. MUBS has been doing dome research in Social enterprises and was selected as the host by the Africa Development Bank which is funding the activity. Social enterprise is supposed to complement government in improving the wealth of people. Bernard Mujuni wrote about the conference in the Observer of July 19, 2013.
Article picked from the Observer of July 19, 2013
On July 11, 2013, Sulaiman Madada, the state minister for the Elderly and Disabled, launched the beginning of what might be one of the best things to have happened to Uganda: a social business.
A social business is a non-dividend company/organization created to solve a social problem.
The concept of a social business was pioneered by the Nobel laureate Prof Muhammad Yunus, who set up Grameen bank. Like an NGO, a social business has a social mission, but like a business, it generates its own revenues to cover its costs.
All profits are ploughed back and reinvested. Part of the profits can also be used to innovate new services or social business ventures. The ideal model engages and works around people and makes them exploit their full potential. The seed capital of $300 to $450 per business can leverage expenses and create opportunities, while catapulting micro and small businesses to graduate from informal to formal sectors.
Therefore, with this new initiative, Ugandans will be introduced to an additional business model other than the capitalism-driven approach that aims at ending income poverty.
Since social businesses operate in a free- market world, they are efficient and effective in solving social challenges and problems because they effectively target the beneficiaries. They are needs-based.
The social business model has worked well Bangladesh, India, Haiti, Albania and other countries where it has effectively helped reduce poverty and improved social welfare by encouraging the poorest and most vulnerable to participate in sound businesses. This has rapidly enhanced income generation, entrepreneurship and job creation for the youth and women.
The Yunus model worked wonders in fighting poverty in rural Bangladesh, attracting the acclamation and the support of the World Bank and International Monetary Fund (IMF).
Over the last 30 years, Prof Yunus has pioneered over 40 social businesses in Bangladesh alone. His model initiates and manages incubator funds for social businesses.
The selected social businesses are then mentored to ensure that they realise their potential. God must have heard the cry of Ugandan people, especially the youth. Uganda’s youth unemployment stands at 32.2 per cent, which is alarming.
This statistical discontent points to the dire need to create job stimuli for the youth in a more sustainable manner. So, the proposed $10 million grant to fund social business in Uganda, as announced by Madada, could be a panacea to the problem of unemployment. Our tertiary institutions churn out a reported 40,000 graduates to the market annually but the economy can formally absorb less than 10% of these.
The need for deliberate interventions to rectify this alarming unemployment time bomb must be addressed by all concerned citizens of the global village. Since the government started the cash transfer programme for the elderly poor, remarkable improvements in livelihoods have been realized in the targeted areas.
The social business model rides on the need and passion to alleviate social problems. With this approach, the Youth Capital Venture Fund initiated by the government should borrow the model in order to make it affordable and sustainable. Commercial banks are profit-driven, always looking to extract the maximum possible interest from their money; asking the unemployed youth to access the funds through them will never truly develop their businesses.
Social business is affirmative action investment with ethical approaches that transform lives. If the social business model is scaled up, it will set up the best foundation for ending poverty among the vulnerable groups and individuals.