SOCIAL ENTREPRENEURSHIP Gerard Farias Associate Professor Fairleigh Dickinson University

Who is this man? Dr. Muhammad Yunus Invented the field of Microfinance Perhaps the best known Social Entrepreneur in the world

What is his story? He learned about indebtedness and found out that small loans would enable people to become more independent The banks did not consider the poor creditworthy and refused to lend to them. He tried to persuade them for several months He then decided to act as guarantor for the loans and the banks agreed (reluctantly) New rules… weekly repayments, bankers to visit; People paid back their loans on time—every time Source: Yunus & Weber (2010) Building Social Business, PublicAffairs, New York, NY

Some key points… He noticed a need He felt deeply concerned about it When faced with opposition, he persisted He developed a creative solution to the issue of creditworthiness He thought long-term… – Weekly repayments in small amounts – Bank officers go to the client Finally, resulted in the formation of the Grameen Bank Model emulated in many parts of the world

Key Principles Entrepreneurs…  Believe in a yet-to-be made future  Human action can create that future  Are comfortable with risk  Are persistent in the face of adversity  Are creative  Are happy to create partnerships Source: Sarasvathy, S. (2010) What makes entrepreneurs entrepreneurial?

Key Principles Social Entrepreneurs…  Believe in a yet-to-made future of which a positive outcome for society is an essential element  Human action can create that future  Are comfortable with risk  Are persistent in the face of adversity  Are creative  Are happy to create partnerships Source: Sarasvathy, S. (2010) What makes entrepreneurs entrepreneurial?

Definitions Entrepreneurs improve the productive capacity of society, engage in creative destruction that propels economic change. Social Entrepreneurs in addition focus on social objectives and create public value. Source: Bornstein and Davis (2011), Social Entrepreneurship (drawing on Say, Schumpeter and Dees)

Other definitions Social Business (Yunus, 2010)—a fundamental change in the architecture of a capitalist economy, freeing it of the flaws that create poverty and other social and environmental ills. For Benefit Enterprise (Sabeti, 2011)— Operates like a business, but its primary focus is to provide social benefits rather than maximize financial returns

What are social needs? Health—Aravind Eye Hospital, Dr. Venkatswamy Energy—Barefoot College, Bunker Roy Water—Charity Water, Michael Wilkerson Education—Teach for America, Wendy Kopp Violence—Fonderie 47, Peter Thum Employment/jobs/livelihoods—Grameen Bank, Mohammad Yunus Poverty—Kiva, Jessica Jackley and Matt Flannery Minority empowerment—Self Help Groups in India Disability—Mirakle Couriers, Dhruv Lakra

What next? Think about what you want to achieve… – Who, what, where? What do you need? – People, money, knowledge, partners? How are you going to get what you need? What kind of structure… for profit? Not for profit? What is going to make your endeavor successful? How will you measure performance? How will you improve continuously? Should you scale up? If so, how?

Resources…