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Importance Social Businesses

Businesses with a conscience. They are concerned with the well-being of the people who buy from them. They want to address a social problem or an issue that no one else seems to be addressing. Although it is still a business, and it has to operate on a profit, the main concern is still the social good that it provides.

One of the examples of a social business is Grameen Bank, founded by Mohammad Yunus of Bangladesh. It provided micro credit to poor women in rural communities so that they could get out of poverty. The women were thankful for the micro-loans. Grameen Bank also helped the women with the training they needed to ensure that they will be able to pay the loans they took. Through this effort, the Bank ensures sustainability and the process does not degenerate into a dole out.

Addressing social issues. There are businesses that address social issues such as poverty, empowerment of marginalized sectors, as well as working with government to end pervasive social problems. These social problems sometimes have lives of their own. When left unchecked, they grow exponentially and become more difficult to tackle. Of course, governments all over the world may be hard pressed to solve these issues but they simply lack the time and the resources to do so. With social businesses, private individuals and sectors have a chance to contribute to solving these problems while ensuring sustainability.

Sustainable development. Sustainable development has been the buzzword of institutions such as the World Bank in the past decades. But somehow, it is very difficult to achieve. Various grant requests have been submitted from all over the world but through the platform of social business and social entrepreneurship, sustainable development has become possible.

Focus on social value and not profit. Profit is not the over-riding goal of social businesses. Instead, they seek to create value and promote the social good. True, they need the profits so they can continue to operate but the margin of profit is not as high as that of commercial organizations and businesses. In effect, they are just making their recipient responsible. Without some form of responsibility from those who receive assistance, they tend to forget about what they receive. The worse thing is they even forget to improve themselves and they come to rely on the service providers.