Social business and poverty alleviation: Lessons from grameen danone and grameen veolia

Abstract

Since Muhammad Yunus first began launching joint ventures with multinational corporations such as Group Danone (2006) and Veolia Water (2008) in Bangladesh, his social business concept has received international attention. With reference to empirical findings from a comprehensive field study in rural Bangladesh, this paper suggests that Yunus' early social business joint ventures do contribute to poverty reduction in terms of the sustainable livelihoods approach. Both Grameen Danone Foods and Grameen Veolia Water Ltd. provide low-income consumers with access to products for their basic needs, while at the same time creating new sources of social and economic capital. However, considering the multidimensional character of poverty, the findings are not suggestive of a panacea. Given the fact that the conscious abdication of personal financial gain by those who invest in a social business company is the defining attribute in Yunus' concept, the authors conclude that his idea is primarily a strong plea for social entrepreneurship. It is a strong call for the efficient use of philanthropic resources in contrast with a more conventional charity approach.