Investment in Microenterprises for Scaling up Business Growth: Evidence from Social Business Project

Abstract

Promoting entrepreneurship among the youth and women is an emerging global trend for inclusive sustainable development. This study aims to unlock the potential of social business investments in microenterprises for turning unemployment into entrepreneurship and scaling up business growth. According to Prof Yunus, "social business is selfless business to solve social problems" based on seven principles. The study has selected 264 enterprises of Nobin Udyokta (NU) meaning new entrepreneurs under Nobin Udyokta Project (NUP) of Grameen Telecom Trust (GTT). NUs and GTT have co-investments under equity participation for at least one or more than 1 year. NUs are basically emerging micro entrepreneurs, who are often disproportionately burdened with multi-dimensions of poverty and lack of working capital, which inhibits business growth. Findings of regression analysis show that social business fund can significantly influence the growth of NU enterprises and increased investment can also create more employments. Therefore, this study is having value to the promoter, advocates, investors in social enterprises, and policy makers seeking strategy for reducing poverty and unemployment through entrepreneurship for sustainable development leaving no one behind.

Role of social business in women entrepreneurship development in Bangladesh: perspectives from Nobin Udyokta projects of Grameen Telecom Trust

“…For this study, we have used the term "social business" defined and practiced by professor Yunus and his companies which he mentioned as the tiny branch of social entrepreneurship (Yunus, 2007). Thus, research on social entrepreneurship although numerous but research conducted specifically, in the field of social business is still insignificant (Ferdousi, 2017;Ferdousi and Mahmud, 2018;Jamadar, 2016) specially related to social business and women entrepreneurship development arena.…”

“…Instead, any profit made stays in the business to finance expansion, to create new products or services, and to do more good for the world (Yunus, 2007). Among the social businesses, Nobin Udyokta Program (NUP) is an innovative social business program for turning unemployment into entrepreneurship (Ferdousi and Mahmud, 2018). It was introduced by Nobel Laureate Professor Muhammad Yunus in 2014.…”

“…The role of Grameen Company is like venture capitalist firm, as they identify potential entrepreneurs, incubate, and provide necessary supports for the promotion of their new ventures. Innovative feature of this social business investment is that no profit will be taken by the venture capitalist firm, except the processing cost of the funds which in turn helps the business growth and creates more opportunities for more Nobin Udyoktas (Ferdousi and Mahmud, 2018). Social business funds are usually allocated to the family members of the Grameen Bank's borrowers whose age are 18-35 years.…”

“…Studies showed that small business fund, like microcredit, increases income of the micro entrepreneurs (Ferdousi, 2015;Ferdousi et al, 2012;Bradley et al, 2012;Mahmud et al, 2017;Mahmud et al, 2019). Study on venture capital also found evidences of increased income of the small entrepreneurs (Memba et al, 2012;Samila & Sorenson, 2011;Smolarski, and Kut, 2011;Ferdousi & Mahmud, 2018). Moreover, venture capital not only assists SME in the provision of funds but also in the internal operations of the business especially in policy formulation (Memba et al, 2012).…”

“…Inclusion of more women is considered as the important means of achieving gender equality which is one of the sustainable development goals. The NU program is designed for creating a world without poverty using social business as a tool (Ferdousi and Mahmud, 2018).…”