Happy Sunday Mighty People!
If you’ve been keeping up with our social media, then we’re sure you’ve seen the term social business a lot! But, do you really know what that means? Do allow us to explain.
A business is social when it’s aim is specifically social impact over maximizing profit for investors. Muhammad Yunus, the Nobel Peace Prize winning economist and founder of the Grameen Bank, says “[the] business objective will be to overcome poverty, or one or more problems, such as education, health, technology access, and environment, which threaten people and society.” The majority of profits are reinvested into the business to further the mission to maximize its impact. Pretty simple right? It’s just using business for a global good!
Because most investors don’t want to invest in something where they get no returns whatsoever, some of you are certainly wondering about where social businesses get capital–the business term for money– to start, operate, and grow? Well, most social businesses do offer modest returns on investments– usually 2-3% annually with long-term payback periods. Investors who invest in social businesses are called impact investors– and they’re growing in numbers!
Njabini is a perfect example of a social business. Our profits are reinvested and as we grow we hire more ladies; and as we hire more ladies we increase our impact! It’s a magical cycle.
So there’s your crash course in social business and impact investing! We hope you’ve learned a little something this weekend!