What is a Social Business?
Nobel Peace Prize laureate Muhammad Yunus (also the Commencement speaker for Rice University’s Class of 2010) proposes a new concept for business, called a “social business” in his recent book, “Building a Social Business.” He argues that social businesses are especially relevant in our world dominated by capitalism, as they integrate the productivity and efficiency of profit-making business towards truly making a positive, social impact. I have been reading his book, and I have absolutely fallen in love with this concept of social business, and its implications for helping humanity.
These are the Seven Principles of social business according to Yunus:
“1) The business objective is to overcome poverty, or one or more problems (such as education, health, technology access, and environment) that threaten people and society- not to maximize profit.
2) The company will attain financial and economic sustainability.
3) Investors get back only their investment amount. No dividend is given beyond the return of the original investment.
4) When the investment amount is paid back, profit stays with the company for expansion and improvement.
5) The company will be environmentally conscious.
6) The workforce gets market wage with better-than-standard working conditions.
7) Do it with joy!!!” =)
The problem: the dependance of Malawian people on expensive fertilizer.
Malawi has a primarily agricultural economy. Thus, the main source of income and food for the majority of Malawians come from cultivating crops such as corn (for their starch staple of nsima), soya, ground nuts, tomatoes, and other vegetables. Unfortunately, the soil here in the Namitete region is not very fertile; hence, fertilizer is necessary for any growth of crops. Because the fertilizer is mostly imported from outside of the region, it is expensive and often out-of-reach for many Malawians, especially those suffering from sickness and stigma from HIV. Local political corruption has prevented the implementation of government subsidies of fertilizer in the form of coupons from reaching many Malawians.
When Tiffany and I visited many HIV support groups in the region, their main challenges included malnutrition, lack of secondary education (which is not free in Malawi) for children, and lack of stable income. Many of these HIV support groups were attempting to pursue an agricultural form of living, and St. Gabriel’s Hospital has been trying to help them by supplementing piglets, seedlings, and other relevant materials. However, again and again, we found that support groups were struggling to cultivate crops due to the prohibitively expensive cost of fertilizer.
Therefore, I suddenly thought, “why not create a local, social business developing affordable fertilizer for the area as a means of bringing the region out of poverty and boosting local productivity and economy?”
Potential solution: a social business for locally and sustainably produced fertilizer employing St Gabriel Hospital’s HIV support groups and community health volunteers
The idea is to produce fertilizer in an affordable and sustainable way to help bring the region out of poverty. Inability to purchase fertilizer due to its expensive cost coupled with lack of savings for the September and October “starvation period” are important contributors to malnutrition. We plan on encouraging sustainable business practices at an individual and HIV support group level through the implementation of microenterprise seminars. However, even with adequate saving skills, the expensive cost of fertilizer still represents a formidable barrier.
Thus, what if a social business were created to not only employ these HIV support groups and community healthcare volunteers, but to create fertilizer in a sustainable and affordable fashion? Would it be possible to produce an alternative substantially more affordable than the current fertilizer that is just as effective? Can we make this a sustainable business that will distinguish the Namitete region and bring in business and income from the rest of the agricultural industry in Malawi?
Tiffany and I have spoken to Alex and Angela of St Gabriel’s Hospital, who are both constantly in the field interacting with both HIV support groups and community healthcare workers. They both really like this idea, and think that it has much promise. We got some contact information for some schools of agriculture in Lilongwe (the capital city), so we hope to seek out advice to see if this idea is even viable.
I recognize that this is a huge undertaking that might not even work out. But the least we can do is do some initial research and perhaps deliver a business plan proposal to the leadership at St Gabriel’s to make them aware of such an option.