Social entrepreneurship in South Asia involves business activities that have a social benefit, often for people at the bottom of the pyramid. It is an emerging area of entrepreneurship that is supported by both the public sector and the private sector.
Social entrepreneurship is capable of empowering groups that don't typically participate in the entrepreneurial market. In South Asia, women entrepreneurs lead 20% of social enterprises. Women-led businesses provide economic empowerment especially in cultural contexts where women are not the main breadwinners. India, Pakistan, and Bangladesh all of which have seen a rise in social businesses in the last few decades.
History
The most successful social entrepreneurial ventures in South Asia have historically worked on initiatives that alleviate poverty, focusing on increasing access to capital. These initiatives have been led by both governments and private enterprises.
In 1969, the Indian government nationalized its banks, and began a campaign to expand bank access across the country. Between 1969 and 1990, the program created 30,000 banks in rural locations that were previously unbanked. While successful in addressing rural poverty with extremely high returns to capital, which is well-expected in low-income countries, urban poor left out entirely. The keep this program going, the Indian government invested significant capital, but during the program's tenure there was no measurement of program effectiveness, which remained an issue to be addressed.
One of the most well-known social entrepreneurs from South Asia, Muhammad Yunus, is a native of Bangladesh. He founded the Grameen Bank in 1976 with the mindset that lending money to poor people could build the credit they need to work their way out of poverty while being profitable. For his work in microcredit, Yunus was awarded the Nobel Peace Prize for "efforts to create economic and social development from below". Due to the Grameen Bank's success, it has inspired a multitude of individuals to also seek out ways to improve human wellbeing through business, especially young entrepreneurs.
Social entrepreneurship is still a nascent field in South Asia, as most of the ventures have only been created in the past five to six years.
Types of Social Entrepreneurship
Social entrepreneurship in South Asia is often focused on building capabilities. Yujuico emphasizes that social entrepreneurship works to create interventions that mobilize capital to aid those who are disadvantaged. Through social entrepreneurship, Shahrazad Hadad states that individuals often seek the following five aims: conceive new markets for social necessities, establish new jobs and social equity, mobilize resources for social good, conceive social capital, and aid beneficiaries and customers.
Social entrepreneurs can pursue these aims and generate social impact through social enterprises and impact investing.
Social enterprises
Social enterprises are business entities that are either public or private that address social issues related to education, health, and access to capital. Alvord, Brown, and Letts emphasize that social entrepreneurship manifests itself in three main ways: combining commercial enterprises with social impact, innovating strictly for social impact without attention paid to profit, and catalyzing social transformation beyond the initial problem. Currently, numbers of social enterprises include 448,000 in Pakistan, 150,000 in Bangladesh, and 2,000,000 in India.
Impact investing
Impact investing currently serves target their investments in South Asia in two main ways: intention of enterprise to create impact and potential to do so. Impact investing often addresses enterprises that are currently on a small-scale, instead of large infrastructure projects addressed by other forms of aid. Current impact investments in South Asia are growingly interested in agro-business, health, information technology, and bottom of the pyramid initiatives. There are currently 50 country-specific impact funds in India, 7 in Pakistan, and 9 in Bangladesh that have deployed a total of 720.4 million US dollars worth of capital in South Asia.
Impact investing can operate at several stages in the businesses' development: seed funding, early stage funding, and growth stage funding.