2 Social Entrepreneurship

Textbook: Chapter 2

Probably the most widely discussed example of social entrepreneurship is Grameen Bank, set up in Bangladesh in 1984 by Muhammad Yunus to provide to provide small loans to people without access to conventional capital. Grameen is still mutually owned by its customers. A large proportion of the loans are to small-scale female entrepreneurs. Yunus was awarded the Nobel Peace Prize in 2006. In the following video Yunnis discusses the setting up of Grameen Bank.

It has been reported that Grameen are partnering with Tesco Bank to set up a micro-finance initiative in Scotland, but the value of microfinance intiatives as a response to poverty is now widely questioned.

Grameen and many other social entrepreneurship ventures are not for profit organisations. But as the textbook chapter makes clear, social entrepreneurship can be based in for-profit organisations so long as the aim of the organisation is to address a social need. It can therefore be argued that payday loan companies are examples of social entrepreneurship. (They are very interesting examples of business innovation as their business models are based on developing social sorting algorithms that take the people who are refused credit by the credit scoring of conventional banks and identify those who are likely to pay the loans back).

One difference between Muhammad Yunus and Errol Damelin, co-founder of Wonga, is that Damelin is unlikely to be winning the Nobel Peace Prize anytime soon.