2. Social Enterprise Network 2

3. Contents 3

4. 4 99% of 300 Social Enterprises, certified by Ministry of Employment and Labor, Dec. 2009, are Social Service Providers. Ex: WeCan [Social Service Provider] WeCan produces cookies to employ forty(40) mentally handicapped youths. Ex: EcoFaeBrick [Social Innovator] EcoFaeBrick, made by Indonesian business students, uses cow dung to produce high quality, low cost bricks in 22 emerging countries. No Social Innovator, and accordingly no social venture capital, is existent in Korea.

5. 5 For the 300 Certified Social Enterprises (or 1,000 planned by 2012) as Social Service Providers. By Social Enterprise Promotion Act, 2007 고용 노동부

6. 6 Under Government’s policy guide and funded by business conglomerates and commercial bank groups, eleven(11) Smile Micro-Finance Foundations ( 미소금융재단 ) were launched in December 2009. Their interest rates are 2-3% below the average bank loan’s. Their financial sustainability is a concern.

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8. 8  Social Service Providers  Social Service Providers [Social Enterprises] (Grant, Subsidy & Loan) Micro Finance Institutions Social Banks Social Venture Incubators Social Venture Capital Funds Micro Finance Institutions Social Banks Social Venture Incubators Social Venture Capital Funds Funding Gov’t Central Fund Civil Foundations Commercial Banks SRI Mutual Funds Individual Donors Gov’t Central Fund Civil Foundations Commercial Banks SRI Mutual Funds Individual Donors [Financial Intermediaries] (Grant, Loan & Equity Investing) [Funders]  Social Innovators  Social Innovators (Capacity Building) (Grant, Equity Investing & Loan)

9. 9 (1) Make Government’s Central Fund under MOSF(Ministry Of Strategy & Finance). Ex: CDFI Fund(Central Fund) at U.S. Treasury Dep’t certifies CDFIs (financial intermediaries) and provides funds to them.

10. 10 (2) Raise interest rate for Micro Finance to 3%(ex) over average bank loan’s: Globally, interest rates for Micro Finance are 12-24%. Hope Seed Loan, Korea( 희망홀씨대출 ): Last twelve(12) months, six(6) commercial banks have successfully provided micro loans to 260,000 micro entrepreneurs on interest rate of 3.5% over average bank loan’s, with default rates of 1.0-1.3% only.

11. 11 (3) Encourage(ex: tax incentive) SRI mutual funds to deposit or invest 1-5% their net assets in Financial Intermediaries. Ex: Pax World’s Community Investing: Pax World, a SRI Mutual Fund in NY, deposits 5% its net assets in social banks or micro finance institutions. In Korea, twenty two(22) SRI mutual funds’ net assets(485 Billion Won) shares 0.24% total mutual fund’s net assets (Apr, 2009), compared to 12% in U.S.

12. 12 Ex: Columbia Business School, NYC, released Social Capital Market Report in 2003 under RISE(The Research Initiative in Social Entrepreneurship) survey project. (4) Survey Philanthropic Funds in Korea to encourage them to behave “Strategically”.

13. 13 To develop and activate Financial Intermediaries and Consequently, to develop Social Enterprises as a whole.

14. 14 (1) Include Social Enterprise in Business School Education. Ex: Seminar on Education of Social Enterprise at Business School, May 28, 2010, Seoul  Take Environment & Energy and Health Care as opportunities for Social Enterprise.  Take Global Poverty (ie Emerging Markets) as opportunity for Social Enterprise, as well as for large corporations & MNCs. Ex: “Out of Poverty”, Paul Polak “The Fortune At The Bottom of The Pyramid”, C.K. Prahalad Treadle Pump

15. Conclusion: 15 Innovation is the key. No Innovations, No Investments.

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