Archive for February, 2010
Case Studies in Social Enterprises
The term social enterprise was created by the American non-profit community in the 1970s, which began to create and operate their own businesses as ways to create job opportunities for the disadvantaged, homeless and other at-risk people. The idea is that a nonprofit business venture or revenue-generating activity can create positive social impact while operating with reference to a financial bottom line. Today, NGOs understand that only by establishing an independent means of support, can they continue to fulfill their mission. An NGO’s new vigor and growth enables it to provide and expand vital services to its constituents and members while moving the organization toward self-sufficiency.
Case Studies in Social Enterprise: Counterpart International’s Experience explains, (1) social enterprise, (2) its importance as a developmental tool in emerging economies around the world, and (3) through four in-depth case studies in Ukraine, highlights the beneficial impact of social enterprises on the non-profit sector, families and communities. These projects were developed and implemented by Counterpart under a grant from the U.S. Agency for International Development between 1997 and 2002.
Counterpart’s experience demonstrates that social enterprises have high potential as a nonprofit sustainability strategy in emerging economies where markets are underdeveloped and entry barriers are low. Comprehensive and well-structured programs like the Counterpart Alliance for Partnership, which complements business training with loans, advocacy and legal advice and networking, increase the likelihood of NGOs’ successful creation of sustainable social enterprises that will achieve both financial viability and social impact in the long term. Counterpart’s social enterprise methodologies provide the tools and inputs that assist their NGO participants in their business activities. With Counterpart’s assistance, NGOs have successfully established or expanded their income-generating activities and, at the same time, are meeting their organizational mission.
Read the entire case study here.
Can MFIs Work as a Distribution Channel to Reach the B60?
The story of microfinance has been told several times over. Having proven itself to be a viable industry, the sector has witnessed increased attention from mainstream investors and corporate sector. While investors have been keen to fund the sector, although cautiously, the corporate sector has been looking for new ways to reach the bottom of the pyramid (BoP) market that MFIs cater to.
Several examples exist of such partnerships within India. The most well-known of them being Hindustan Unilever’s partnership with the ACCESS Microfinance Alliance (AMA) for the sale of its Pureit home-use water purifiers. Emami, a leading Indian cosmetics company is currently establishing a partnership with Spandana, one of India’s leading MFIs to engage women entrepreneurs who take their personal care products to previously-untouched markets.
But how effective are MFIs as distribution channels? What sort of products sell best through MFIs? What should MFIs and corporate keep in mind while entering into a partnership? The Monitor Group’s Inclusive Markets team delves into these questions in their latest study, Stretching the Fabric of MFI Networks authored by Nishant Lalwani and Michael Kubzansky.
The report highlights four models from India – Hindustan Unilever Water Filters, Moksha-Yug Agarbatti Manufacturing, SKS Mobile Phones, and Emami Personal Care Products. The case studies bring out several interesting findings. For example, Hindustan Unilver which partnered with AMA to sell their water filters found that the cost of distribution was higher than expected, and additionally encountered after-sales service which proved too taxing. It didn’t help that customers didn’t fully understand the utility of an intangible product such as clean drinking water. SKS, which sold mobile phones on credit found they were being blamed for technical glitches and poor service customers received from the mobile phone service provider.
Based on the findings of these four projects, the report goes on to establish four viable models for MFI Channel Expansion. It also offers valuable advice for MFIs and product and service providers. The report concludes that while MFIs have undoubtedly been successful in reaching the B60 (the term used in the report to indicate the bottom 60% of the economic population), one should not assume a “one-size-fits-all” approach, and must careful assess the suitability of a product, the nature of the relationship between the MFI and providers, as well as distribution and sales aspects.
The Report can be downloaded from the Monitor Website.
An Innovative Milk Vending Machine for India’s Dairy Sector
In March 2006, four friends and alumni of the Indian Institute of Technology, Madras connected form different parts of the globe and started talking. Their desire was “to build a product-based company that would solve some real problems of India.” By mid-2007, they were all in Chennai, India and had set up shop as Invention Labs. Since their set up they have engaged in several projects. Recently they made their foray into building the “Milk Tree,” a vending machine for milk sachets.
In this article, Anand Krishnaswamy illustrates how this innovative product has the potential to change the way dairy farmers, co-operatives, suppliers and consumers interact and the positive spin-off for the dairy sector. Anand is a consultant with the Lemelson Foundation’s India Liaison Office in Chennai.
Read the entire article here.