Types of Social Business

There are two types of Social Business:

  • Type I

Focuses on businesses dealing with social objectives only. E.g.: The product produced is for the benefit of the poor or targeted to solve a specific social problem. Grameen-Danone is an example of Type I social business. The Shokti Doi yogurt produced in the plant in Bogra, Bangladesh, is fortified with micronutrients that are missing in the poor children and it is targeted to fight malnutrition. If malnourished children eat two cups of Shokti Doi per week for approximately 8-10 months, they grow healthy.

  • Type II

Can take up any profit maximizing business so long as it is owned by the poor and the disadvantaged, who can gain through receiving direct dividends or by some indirect benefits. E.g.: The product could be produced by the poor but exported to an international market while net profits would go towards workers benefits. Examples of Type II social business are Grameen-Otto and Grameen Bank. Please note that Grameen Bank is both Type I and Type II social business, as it is owned by the poor people and it provides a financial service (microcredit – loan without collateral for income generating activities) which was previously unavailable to poor people, especially women.