An Experience of Nobin Udyokta program in Bangladesh
Brief Concept of Social Business:
A social business is a new concept in Business sector. It is a new kind of business. It is different from a traditional profit-maximizing business or non-profit organization. It is also different from ‘Social Enterprise’, ‘Social Entrepreneurship’ or ‘Socially Responsible Business’, which generally describes varieties of profit maximizing companies.
Social Business is to solve social problems by using business methods, including the creation and sale of products or services. Grameen Danone, for example, is working to solve the problem of malnutrition by selling affordable yogurt and Grameen Veolia Water addresses the problem of arsenic-contaminated drinking water by selling pure water at a low price so that the poor can afford. There are such many other examples-some are already in operation, others are in pipeline.
There are two kinds of Social Business. One is a non loss, Non-Dividend Company devoted to solving a social problem and owned by investors who reinvest all profits in expanding and improving the business. The examples mentioned above fit into this category. We call this Type-I Social Business.
The second kind is a profit- making company owned by poor people, either directly or through a Trust that is dedicated to a predefined social cause. This is a Type-II Social Business. Since profits flow to poor people are alleviating poverty, such a business is by definition helping to solve a social problem. Grameen Bank is an example of this kind of social business.
Unlike a non-profit organization, a social business has investors and owners. However, in a Type-I social business, the investors and owners don’t earn profit, dividend, or any other form of financial benefit. The investors in a social business can take back their original investment amount over a period of time they decide. It could be a very short period, such as one or two years, or a long period, as long as fifty years or more. But any increase in the money going to investors beyond the original investment disqualifies the business from being a social business.
This even applies to an adjustment for inflation. In social business, a dollar is a dollar. If you invest a thousand dollars in a social business, you will get back a thousand dollars-not a penny more. It is very clear that the notion of personal financial benefit has no place in social business.
Introduction of Nobin Udyokta Social Business:
Nobel Laureate Professor Muhammad Yunus, The founder of Grameen Bank innovated Social Business and introduced Nobin Udyokta (NU) Social Business Program for the children of GB borrowers. He invited different companies to mobilize Social Business Fund and started NU Program in Bangladesh. Four Grameen Companies came forward to create a SB Fund and started NU Program. NUP is for solving the problem of youth unemployment. NUP considers young people not as burden or liability but as asset and resources. The theme is ‘We are not Job- Seekers, We are Job- Givers’. NUP is designed for and dedicated to the identification, incubation and promotion of new entrepreneurs from GB member’s families for turning the unemployed son or daughters of Grameen Bank borrowers into an entrepreneur. Not for seeking Job, but to offer job to other unemployed young whether they are educated or not. To start new business or expand his/her existing business.
Two NUs are examples of Unemployed Youth :
Low income families live on hand to mouth in the rural areas of Bangladesh. Education is a fundamental right of every child but drop out from school and college is very common for the children of poor families due to lack of financial solvency and other socio economic crisis. Mr. Tusar Kanti Saha and Mr. Liton are the examples of this kind. Both of them never stopped but dreamt of better livelihood despite facing many impediment in their lives. They are now the examples of succesful entrepreneurs who were unemployed before.
M/S Shanti Chemical Works
NU’s Name: Mr. Tushar Kante Shaha
Age: 27 years
Son of GB borrower in Chandpur
He was an unemployed young.
Started a small factory with financial support received from his mother (GB Member) to produce candle and puffed rice.
Joined NU Program in December 2014.
- Took Tk .3,00,000 (Three Lac) as equity investment from GT.
- Engaged in producing diversified products such as Candle, Rose water, Agarbati and puffed rice.
- Increased his yearly sale from 25 lac to 45 lac Taka. Present total assets is Tk 1,113,000.
- Generated employment opportunity for 7 women. 6 are daily basis workers.
- Monthly net income has increased from Tk 25000 to Tk 45000
Lima and Fatema Machineries Store
NU’s Name: Mr. Liton
Age 30 years
Son of GB borrower in Dhamrai, Dhaka
Education: Primary level
Joined NU Program in June 2015.
- Bought power tiller and old tempo with the financial assistance from his mother.
- Possesses a dream to open motor parts shop
- Had an accident and got injury in backbone
- Left driving three wheelers (tempo) and opened a motor parts shop
- After taking equity of 3,00,000 (Three Lac) from GT, his daily sale has increased to 30,000 Tk.
- Generated 3 employments.
Criteria of NU
- Parents must be a current GB borrowers for at least 3 years
- Former GB members who had been in GB for at least 7 years
- Age between 18 to 35 Years
- Age bar may be relaxed if the NU is a female
- Have a dream and will force to materialize his/her dream
NU Social Business is called partnership model
- NUP has been developed as a partnership model between the investor and the NU.
- In the partnership, the investor invests the fund in the business jointly with the NU.
- It is a social business for investors but for NU, it is a traditional business.
- As a partner, investors will not take any profit, NU will pay principal amount and ownership transfer fees only from its profit.
- The aim of the investors is to develop the NU as an entrepreneur and for that the investors not only invest the money but also monitor, mentor and guide the NU and his business.
- The NU has an option to pay the fund back generally within three years according to mutually agreed flexible repayment schedule.
Technologies used in monitoring the business of NU
- As instructed by Nobel Laureate Professor Muhammad Yunus, Grameen Communication has developed an elaborated Monitoring Information System (MIS) and simplified accounting software for all NU projects.
- Every NU is requested to send SMS to Grameen Communication server everyday, following the prescribed format. The six basic information is included in the format i.e. Date, Daily Sale, Received Amount, Daily Purchase, Daily Expenses and Cash in Hand.
- Quarterly, half yearly and yearly closing reports have to be done according to the prescribed format. NU has to send his progress reports to the investors to know about the detail financial position of his/her business.
- Due to daily MIS, the NUs are updated on his/her business position.
Introduction of Mobile Banking :
Mobile Banking is very popular in Bangladesh. There are many companies which offer Mobile Banking Services. According to the advice of Nobel Laureate Professor Muhammad Yunus, GT has started using the technology of SureCash Mobile Banking. GT has signed an agreement on 17th February, 2016 with Progoti System Limited to start a pilot project of Mobile Banking in 04 different areas where GT has implemented NU program. Through this mobile banking GT now disburses to NU and collects the repayment from NU. It has made the disbursement and repayment system more secured and convenient.
Update of NU Program
Under the guidance of Professor Muhammad Yunus, four Grameen Companies formed Social Business funds for implementing NU Program and support Social Business projects. The companies are Grameen Trust, Grameen Kallyan, Grameen Telecom Trust and Grameen Shakti Shamajik Baboshya Ltd.
6281 NU projects have been approved with the investment of BDT 842.37 million (USD11 million) up to August 31, 2016. On an average, 700 projects get approval every month. Tentatively, 8875 jobs have been created by the NUs. Out of 6080 NUs 201 are female. Four Grameen companies now cover 33 administrative districts in Bangladesh.
- 6281 Families have got the opportunities to expand their business
- Around 15,156 employment has been created
- Employment opportunities created for unemployed young
- Positive Growth in their Business
- Better food, education and health services for family members. The Youth need opportunity not charity.
- NUP has already demonstrated that given the proper care and support the young can grow and set examples for others and turn unemployment into entrepreneurship.
Nothing is impossible to make a business successful if someone possesses burning positive desire, is hard working and maintains punctuality that the NUs have demonstrated. If the opportunity can be created for support services like financing, training, counseling, networking, information technology, the youth can take risk to generate employment not only for themselves but for others also. NU program has proved that if the businessman, companies, NGOs, Development Agencies come forward to mobilize the SB Fund and have a mission to make zero unemployment in particular area/region, make plan accordingly and provide funds to the unemployed youth, they can easily make zero unemployment in Bangladesh which will be a lesson for others.