The Business of Changing Lives
(reprinted from September 15th edition of Streetvibes)
In Bangladesh in the 1970s, Mohammad Yunus founded Grameen Bank, an organization that seeks to end poverty by extending small loans to poor people who are often excluded from commercial banks. From Grameen Bank, Yunus developed a philosophy of social business, in which, instead of building profit, the bottom line is addressing some social problem.
Social businesses are cause-driven. Similar to many businesses, investors contribute start-up money to get the business going. Once it is off the ground and turning a profit, the investors begin to regain their initial investments. Unlike conventional businesses, however, social businesses don’t pay dividends; all profits are reinvested back into the business to ensure sustainability and continued growth.
Grameen Bank was the first social business. As it grew and became self-sustaining, Yunus used his philosophy to address social issues such as childhood malnutrition, inadequate medical care, lack of clean water, foot-borne diseases and access to energy.
While I was in Bangladesh this summer, four social businesses and Grameen sister organizations had a particular impact on my experience. Grameen sister organizations are not social businesses per se, but work to address some social problem – often not seeking to make any revenue. The sister organizations operate more like nonprofit organizations in the United States.
Grameen Danone is a partnership between Grameen and Dannon, the French yogurt manufacturer. The mission is to bring better nutrition to poor, rural children who often suffer from nutrient deficiencies, such as vitamin A, zinc, iron and calcium. Grameen Danone yogurt, packed with these nutrients, is served in six- and eight-ounce cups. The yogurt is made from fresh milk purchased from farmers in the area, some of whom are Grameen Bank borrowers, directly benefiting the borrowers and other local farmers. Women in the village sell the yogurt door-to-door for six or eight taka (about 11 U.S. cents) per cup, depending on the size and flavor. (Mango flavor costs more).
By distributing the yogurt in this manner, one woman in the village is employed. The yogurt is also sold in Dhaka, the capital city. The cost is slightly higher in the city, with the price cheap enough that poor families can purchase it but high enough that the profit helps to cover the cost of production and distribution in the rural villages.
The Bangladeshi government loaned Grameen over 1,000 fishing ponds in the northwestern part of the country. The ponds have been for fisheries for centuries. Grameen devised a plan that would also help to alleviate poverty while turning the fisheries into a profitable business. The result was a 50/50 partnership between Grameen and the poor families living along the fishing ponds. The families provide the labor of maintaining and fishing the ponds, and Grameen provides training, expertise and breed the fish to stock the ponds. The profits from selling the fish is split equally: 50 percent going to the fishermen, women and families and 50 percent going to Grameen Fisheries to cover overhead and operating costs.
Grameen Shakti is a sister organization dedicated to bringing green energy, health, income and jobs to rural Bangladesh. Grameen Shakti has four main programs: solar-energy systems, improved cooking stoves, biogas and organic fertilizer. Families purchase solar panels through a soft credit scheme, making them affordable. The panels are able to power lights and fans in a village home for several hours a day.
Most Bangladeshis do not have access to natural-gas lines to operate cooking stoves. As a result, people have to burn debris, wood and crop residues as fuel to cook food. This leads to deforestation and soil erosion as well as health problems – smoke and pollution inhalation – for women, who are often responsible for cooking.
Engineers work one-on-one with families to construct biogas plants on the villagers’ property and train families on maintenance and biogas technology. Families use the waste from their livestock to generate the biogas. Similar to the solar panels, the materials are purchased through a soft-credit program, making the plans affordable. The improved cooking stoves helps families use the biogas efficiently.
Grameen Shikkha is Grameen’s effort to address illiteracy and lack of educational opportunities for poor children. The mission of Grameen Shikkha is to provide slum children with a basic education to improve their work opportunities. Students receive instruction in English, Bangla, simple mathematics, social sciences and the environment. They also study Bangladeshi customs and arts.
The school, a single 10’x4’ room, has no desks or chairs but 20 smiling students and a teacher sitting on the floor with a stack of books in front of each student. The chalkboard at the front of the room had a welcome message for us visitors from the United States. The room was dimly lit, with one light bulb dangling from the ceiling. The students, ages 12 to 14, were in fifth grade.
The students rise at 6 a.m. and begin work, many of them sewing beads and embellishments on saris to be worn by brides. They work until 9 a.m., taking a break until 2 p.m. School is from 2 to 5 p.m. Students then return to their homes, where they work until 10 p.m. This doesn’t leave much time to play or study, but their families are in desperate need of the money the children can earn. It takes about one week to sew all of the beads and embellishments on a wedding sari. One child makes 900 taka a week (less than $13 U.S.); another, a girl, makes about 250 taka (less than $4).
We asked the children what they want to be when they grew up. It seemed too easy to wonder why we would even ask this type of question – these children are “grown up.” They work eight hours a day and have school three hours a day. Their lives seem to parallel that of a working American graduate student. But even if I were discouraged by the barriers stacked against them, the students were full of hope: they want to be teachers, doctors, pilots, businessmen. They are determined to improve their lives and leave the slums, and Grameen Shikkha is determined to help them achieve their goals.
One might wonder what three hours of classroom instruction would do, but the goal of Grameen Shikkha is to provide what little education they can to children who would otherwise work for 12 or more hours a day. Fighting child labor in Bangladesh is difficult: So many people are struggling to make it day-to-day. Convincing families to give up some of that potential income is difficult. But Grameen Shikkha keeps going back to the families because they know the parents want to provide a better life for their children.
The instruction in primary school could lead to scholarships to go on to high school and help the children improve their lives. Grameen Shikkha has launched a new scholarship program that will help students’ families pay for high school and perhaps earn scholarships to university.
A month learning about all of the different ways that Grameen is working to address poverty in Bangladesh wasn’t nearly enough to completely understand all of the issues that contribute to the level of poverty in Bangladesh, but it was enough time to learn the impact that a social business can have on one family’s life.
Cincinnati has several social businesses that aim to help the community overcome poverty. Streetvibes provides entrepreneurial opportunities and an income to homeless people. Venice on Vine is a pizza restaurant and catering service that teaches job skills to low-income Cincinnatians. Building Value salvages reusable materials for sale while providing people who have workforce disadvantages an opportunity to gain valuable experience and transition into construction and retail careers.