From Grameen Bank micro-credit to social business to social economy- A case study proposal: compare and

contrast Bangladesh and Canada.

Dr. Kazi Abdur RoufSocial Economy CentreUniversity of Toronto

Fifth Annual ANSER Conference

Sir Wilfrid Laurier University & University of Waterloo Waterloo, Ontario, Canada.

May 29 - June 1, 2012.

Objectives of the study • To study different micro-credit organizations, social businesses initiatives in these two countries

•To explore their different frameworks, operational structures, funding models, governance and their pros and coins

•To explore possibilities private sectors , public sectors and charities blended social economic organizations

•To identify their expanding trend, their scope, contributions, future possibilities, barriers and limitations

Benefits of the Study

•Could help Canada and Bangladesh to gain insight into new ideas, policies, and lessons in order to improve initiatives in both countries•Assist to learn SEOs different legal structures, funding models, operational strategies, governance and their pros and coins

•Could help Canadian and Bangladeshi social entrepreneurs, and the private sector and public sector leaders to get different ideas from the study

•Identified different Entrepreneurships initiatives and development in Canada and Bangladesh.

•SEOs have a “triple bottom line” missions and services to communities

Study questions/objectives•What are the different micro-credit models exist Bangladesh and Canada?

•Why are micro-credit programs very popular in Bangladesh, why not in Canada?

•How do social economic business organizations (SEBOs) form, function and governance in Bangladesh and Canada?

•How can individuals prepare themselves to participate in the field of social entrepreneurship?

•How could non-profit sector reorient itself?

•What are challenges (SEBOs) facing to run the organizations and

•What are the means need to achieve financial sustainability of the organizations?

Neo liberalism 1970s ?•Institutional reconfiguration & discipline•Fiscal Restraint amid unlimited Competition •Financialization •“flexibility”/private-sector setting bar•Workplace intensification/union-busting•Corporate/high-income earning tax cuts•New subsidies to capital•Consumption taxes/user-fees•Market provision/inflation targeting (Everything solve by market)

•Privatization/individualism•Free trade agreements•40,000 public workers eliminated, $28 billion cut over next 4 years•Economic inequality greatest in our human history

Statistics• Two-thirds of US income gains between 2002- 2007 went to top 1%• 1% households control more wealth than bottom 90% in the world• 2% households are above $250,000 in USA and Canada• Bottom 90% of us earning less in real dollars than in 1973• One rule economy favors large corporations power over citizen’s

power• In 1990s financial industries grew so fast • By 2000s corporate profits jumped to 40%• Iraq war costs a $3 trillion • Half a trillion dollars on advertising, $70 dollars for every human• No Keynesian welfare economy • Increased invisible hands of selfishness• Create social distance and robbed local economy

continue• Cooperatives provide 20% more jobs worldwide than do

multinational Corporations

• 90% of Indians work in the informal economy (IE)

• In Latin America, IE created 85% of the jobs in 1990s

• Brazil in just six years (2001-2007) cut poverty by 25% to 40%

• Vietnam cut its poverty rate from 58% to 16% in less than two decades using public investments in jobs

• Bangladesh cut its poverty rate from 74% to 34% contributed by MFIs and NGOs

• Reduced poverty 9.4% 2003-2008

Toronto Metro Statistics (June 06, 2012)•Canada’s highest salary earners work in finance, despite being the target of occupy protesters•1% need to make income at least $452,887 /yr. Among them 10% richest work in the financial industry, the rest are doctors, dentists and corporate managers •$275,000 income in the top 1% are bankers and stock brokers•Top 1% control 14% of total income , which was 8% in the 1970s.•82.5% are male among top 1% income group•Average income $36,000 for the other 99%•58% have bachelor's degrees vs 19% of the total population

• 52% of them work at least 50 hours a week compare to 20% of the rest of the population

Social Economy as a subject in Canada and in Bangladesh•Many researchers named the concept differently

•SE is popular in Canada; Bangladesh is familiar with social business

•Social business organizations-cooperatives, nonprofit agencies, social enterprises and community economic development organizations, etc.

•Different (SEBOs) have diverse

• Funding models

• Legal structure

• Functional frameworks

•Operational strategies and

• Faces challenges

Diagram: the intersections of the private sector, public sector and social-economic organizations three areas.

Canada public funded social orgs

Social Economy Organizations

Private sector for profit

orgs Public sector

practices

Bangladesh (MFIs)

Methodology of the Study•Compare and contrast Canadian SEOs with Bangladeshi SEOs•Review Social economy literature•Visit different SEOs. •In-depth case studies of SEOs in Bangladesh and in Canada

• In Bangladesh•Community micro-financing institutions-Grameen Bank/BRAC/ASA;•Social businesses-Grameen Health, Grameen Danone, and Grameen Veolia Water

• In Canada•Ottawa Community Loan Funds, Alterna Credit Unions, and Canadian Cooperative Associations (CCA) and other small cooperatives

•Visit the SEOs, collect their brochures, organizational memorandum of incorporations, annual reports, articles and books•Process collected data and review their information•Write a research paper.

Concept of social economy •Social economy is a bridging concept for organizations that have both social and economic objectives

•Blending social, economic and environmental missions for the wellbeing of humanity and social development

•Some renamed it ‘Third Sector’

•Not-for-profits/NGOS, civil societies, non-profit organizations (NPOs), self-help groups, Solidarity Economic etc.

Canadian social economy organizations • In Canada

• There were 5,753 non-financial co-operatives, with 5.6 million members, 85,073 employees, $27.5 billion revenues and $17.5 billion assets

•Cooperatives and nonprofits have millions of members and manage millions of dollars every day.•Vancity community micro loan funds in in Vancouver

• The Ottawa Community Micro-Loan Funds program is different from traditional banking in Canada

•Maytree Foundation in Canada

• In the United States • A coalition of more than 80 social entrepreneurs called America Forward

• The Centre for American Progress support an innovation fund, $50 million

Bangladesh (NGOs)/micro-finance institutions (MFIs)•Social business, NGOs, and Charities are serving the disadvantaged people

• Grameen Bank, BRAC, ANNESHA, • Nejera Kori, Community Satellite Clinics, •Women for Women, CARE-Bangladesh etc.

•Hybrid social business organizations: • Grameen Danone, • Grameen Vilia ater, • Grameen Addidas

• Comilla Cooperatives , Bangladesh Rural Development Board, (BRDB) although they drifted away from their mission.

Bangladesh (NGOs)/micro-finance institutions (MFIs) Continued

•Many social enterprises depend on external donors funding like

•CIDA, SIDA, NORAD, US-AID, World Bank for education, health, environment, relief and other services

• Government funding for social businesses is limited

•Limited numbers R &D social economy projects

Similarities• Thousands of jobs, billions of revenue generated, and promoted

environmental development through cooperatives and non-profit organizations

• The Grameen Bank and its other sister organizations; ASA, BRAC and

other micro-credit projects support millions of micro-enterprises in Bangladesh

• These SEOs have promoted social enterprises in these two countries

Challenges for Community based enterprises (CBEs)

• Maintaining a balance between individual and collective needs, and

• Balancing economic and social goods

• Financial sustainability

Private sectors profits devastating human ethics

•Although the private sector is making a contribution to their own capital, their social, ethical and environmental performance has raised concern in society. The private sectors are maximizing profits through tax evasion, loan defaults and share scandals; they provide sub-standard goods to the market, creating health hazards for the people.

•The third sector organizations are isolated from the mainstream policy process in Bangladesh, but in England the voluntary sector has built a formal representational and reporting institutional process framework (Elson, 2010).

Differences

•Canadian nonprofits/cooperatives are institutionally separate from government

•They are self-governing, but incorporated with governments• • In Bangladesh BRDB cooperatives fully depend on public funding

• Huge micro-finance organizations exist in Bangladesh but they are struggling to survive because of ROI

• Many Islamic philanthropic organizations work/support orphans, provide reliefs

Wrapping up

• In Bangladesh, different social economic organizations have different frameworks models, funding models, but no-one -stop information

•The concept of social economy is very popular in Canada which is rising in Bangladesh

•Bangladeshi NGOs need a platform to share their experiences

•Both countries social entrepreneurs/leaders could get ideas from the study