Microfinance Loans

Social Business

In recent times spread a new concept is linked to the microfinance industry, is "social business" concept, to learn more about this new concept take a look at the Wikipedia definition:

A social business is a non-loss, non-dividend company designed to address a social objective. The profits are used to expand the company’s reach and improve the product/service. This model exists in some countries (Italy and others), but has recently been revived from the work of Muhammad Yunus and others.

Social business is a cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company, no personal monetary gain is desired by the investors. The company must cover all costs and make revenue, at the same time achieve the social objective, such as, healthcare for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy, etc. in a business way.

The impact of the business on people or environment, rather than the amount of profit made in a given period measures the success of social business. Sustainability of the company indicates that it is running as a business. The objective of the company is to achieve social goals.

Source: Wikipedia