Theory: What are the key trends and issues being addressed in the development of social enterprise and entrepreneurship in the developing world? Practice: What range of organizations are actively engaged in social enterprise and entrepreneurship in the developing world? What are the unique considerations for these ventures? http://www.socialentrepreneurship.ca/indev308/

1. INDEV 308: Introduction to Social
Entrepreneurship
Class 9: Social Entrepreneurship in the
International Development Context
Monday, July 4, 2011
Instructors:
Norm Tasevski (norm@socialentrepreneurship.ca)
Karim Harji (karim@socialentrepreneurship.ca)
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2. © Norm Tasevski & Karim Harji

3. © Norm Tasevski & Karim Harji
Agenda
• Ashoka
• Social enterprises in the developing world
• Impact investing
• Reviewing the Video Assignment
• Next Week
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4. © Norm Tasevski & Karim Harji
There are MANY issues in the
developing world…
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5. © Norm Tasevski & Karim Harji
Traditional approaches have
had relatively limited impact…
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The principles of social
entrepreneurship have a role to play…
Resourcefulness
Motivation
Innovation
Risk Taking
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7. © Norm Tasevski & Karim Harji
… in education
Source: http://www.enterprisingschools.com/markets/global
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8. © Norm Tasevski & Karim Harji
Crowdsourcing educational innovation:
OpenIdeo + Grey Matters Capital
http://www.openideo.com/open/how-might-we-increase-the-availability-of-
affordable-learning-tools-educational-for-children-in-the-developing-world/
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9. © Norm Tasevski & Karim Harji
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… in health
Source: http://www.visionspring.org/what-we-do/why-eyeglasses.php
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11. © Norm Tasevski & Karim Harji
Video: Aravind
http://www.youtube.com/watch?v=3cjnNPua7Ag
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… in agriculture
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13. © Norm Tasevski & Karim Harji
… in communication
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Video: Ushahidi
http://vimeo.com/7838030
http://www.ted.com/talks/erik_hersman_on_reporting
_crisis_via_texting.html
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15. © Norm Tasevski & Karim Harji
An untapped (local) market
Images: http://bottom-of-pyramid.blogspot.com/2008/10/fortune-at-bottom-of-pyramid-2.html
http://www.thehindubusinessline.in/life/2004/11/26/stories/2004112600140300.htm
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16. © Norm Tasevski & Karim Harji
Capital is often (perceived as) the key constraint to
growth… but… perhaps misalignment is the issue
Source: Alex Nicholls and Cathy Pharoah (2008) The Landscape of Social Investment,
http://www.sbs.ox.ac.uk/centres/skoll/research/Pages/landscapeofsocialinvestment.aspx 16

17. © Norm Tasevski & Karim Harji
The potential of impact investing
“ Impact investing could expand to a $500
billion industry in the next decade.”
-- Monitor Institute
“… a potential investment opportunity
between $400 billion and $1 trillion with
potential profits between $183 billion and
$667 billion in the next decade…”
-- JP Morgan
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18. © Norm Tasevski & Karim Harji
There is an emerging class of
impact/social investors…
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… that is providing flexible capital
(+ more) to these social enterprises
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Acumen Fund
• http://www.youtube.com/watch?v=g-uhz0J3JTE
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21. © Norm Tasevski & Karim Harji
Patient Capital(ism)
Jacqueline Novogratz (founder of Acumen Fund) –
TED talk on “a third way to think about aid”
http://www.ted.com/talks/jacqueline_novogratz_a
_third_way_to_think_about_aid.html
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22. © Norm Tasevski & Karim Harji
Market-Minded Development
• What did you find most interesting about the
Acumen Fund’s approach?
• What challenges or opportunities mentioned in the
article do you think will be most critical?
• What do you think success looks like for the Acumen
Fund? How would you measure it?
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23. © Norm Tasevski & Karim Harji
Acumen Fund: Student Leaders Workshop
• http://www.acumenfund.org/investment-
story/acumen-fund-student-leaders-workshop.html
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24. © Norm Tasevski & Karim Harji
The Impact Investing Marketplace
Source: Monitor Institute (2008) “Investing for Social & Environmental Impact, A Design for Catalyzing an
Emerging Industry”, http://www.monitorinstitute.com/impactinvesting/
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25. Break
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26. © Norm Tasevski & Karim Harji
Microfinance
Microfinance as a subset of impact investing…with a 40 year track record
Images:
http://southeastasia.foreignpolicyblogs.com/2011/05/27/the-poverty-of-microfinance/
http://simran.crownpac.net/blog/2007/05/04/microfinance-%E2%80%93-a-zero-sum-game/
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27. © Norm Tasevski & Karim Harji
“The promise of microfinance”
The (previously) unbankable now have…
• Access to credit
• Understand how to use credit
And have demonstrated…
• An ability to repay in full, and on time
• Through peer pressure, no collateral required
So that…
• Money can be recycled for further lending
• Create businesses and economic growth
• Empower people and improve social conditions
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28. © Norm Tasevski & Karim Harji
The growth of the microfinance industry
Source: http://blogs.cgdev.org/open_book/2010/02/charting-growth.php
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29. © Norm Tasevski & Karim Harji
An industry in crisis?
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30. © Norm Tasevski & Karim Harji
Let’s revisit these assumptions…
The (previously) unbankable now have…
• Access to credit
• Understand how to use credit
And have demonstrated…
• An ability to repay in full, and on time
• Through peer pressure, no collateral required
So that…
• Money can be recycled for further lending
• Create businesses and economic growth
• Empower people and improve social conditions
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31. © Norm Tasevski & Karim Harji
State of the industry
Source: “Microfinance Banana Skins 2011: Losing Its Fairy Dust”, http://www.cmef.com
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Assessing the impact of microfinance
Source: http://blogs.cgdev.org/open_book/2009/06/roodman-morduch-2009.php
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Investing in microenterprises vs SMEs
• Which is “better”? Why?
• Under what conditions?
• How do (or would) we know?
** Draw on the reading by Aneel Karnani, and Serge’s talk earlier in the semester
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34. © Norm Tasevski & Karim Harji
So what does this add up to?
• Market-based approaches can (and must) have a role
to play alongside traditional approaches to aid. But
there will sometimes be tensions between them…
• There will always be a need for traditional grant-making
because you can simply not expect a financial return for
all situations e.g. humanitarian disasters
• Impact investing and microfinance are approaches that
are challenge traditional notions of risk and return by
adding a 3rd dimension: (social) impact
• The principles of social entrepreneurship can be applied
to traditional approaches in order to help them scale
even more successfully. This depends on balancing the
financial and social tensions, and taking into account
the local context…
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35. © Norm Tasevski & Karim Harji
Smart or Right? Thinking like a Philanthropist
and Investing in Social Impact
• http://nextgencharity.com/talks/sasha_dichter_sma
rt_or_right
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36. © Norm Tasevski & Karim Harji
The 2nd Online Video Assignment
Expectations
– 2-5 minutes
– Explain your business model:
• How the customer “experiences” your product/service
(“here’s how it works…”)
• Why the customer will be willing to pay for your
product/service (instead of the alternative – e.g. a
competitor’s product or some other substitute product)
• How you make money
• How your model achieves social/environmental goals
– Think of this video as a “practice run” for your final pitch
– Use of visual aides is a bonus, but not necessary
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37. © Norm Tasevski & Karim Harji
Next week
• Lecture on the Enabling Environment for Social
Entrepreneurship
• Guest lecture by Jennifer King, Executive Director of
Social Venture Partners Waterloo Region
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