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Social enterprise: A growing sector in need of support

  • Published at 06:41 pm November 16th, 2016
  • Last updated at 06:42 pm November 16th, 2016


Bangladesh has been a global pioneer in social enterprise and there is a long-standing tradition of commercial models delivering socially minded services and goods but to date there has been little quantitative evidence to draw upon. Organisations such as BRAC and Grameen are considered to be household names not only in Bangladesh, but all over the world. However, the social enterprise eco-system in Bangladesh needs proper nurturing in terms of knowledge, skill, finance and a unique policy framework for it to really flourish.

In an attempt to truly understand the impact and scale of social enterprises in Bangladesh, and to identify the barriers hindering the growth of this sector, the British Council conducted comprehensive studies on the social enterprise landscape in Bangladesh. The study yielded two reports – ‘The State of Social Enterprise in Bangladesh’ and ‘Social Enterprise Policy Landscape in Bangladesh’. The reports find that social enterprise is growing and is creating jobs for disadvantaged groups, empowering women, and addressing social exclusion.

Social enterprises are businesses which trade for a social purpose, re-invest surpluses into their social objective, and make themselves accountable for their actions, rather than simply maximising profits for owners and shareholders.

The study generated thought-provoking findings for the mass and policy makers alike. For instance, it found that a third of the respondents of the survey work in the education sector. Although 39% of the enterprises working in this sector are led by male compared to a meagre 6% by women, a fifth of all social enterprises were found have been led by women – significantly higher than the scenario in mainstream business (5%). Women in social enterprises make up 41% of the full-time equivalent workforce, which is more than double the proportion of female participation in the country’s general workforce. Needless to say, social enterprises have been playing a key role in women empowerment from underneath the veil.

Bangladeshi social enterprises are young and so are their leaders. The study found that 77% of the social enterprises in Bangladesh are six years old in average, established between 2009 and 2015. Most of these enterprises are led by youth who are under 35, which indicates that the youth are taking the mantle of leadership to make a positive change in the society. Bangladeshi social enterprises are generating an average annual turnover of Tk2.1 million and nearly three-quarters of the social enterprises expect a substantial increase in turnover in the next fiscal year.

One of the most important findings of the study is that 90% of the social enterprises are currently working with individuals from socially and economically disadvantaged communities, creating employment opportunities especially for the disadvantaged groups – supporting and empowering the most vulnerable members of our society.

However, the study highlights some factors that are hindering smooth growth of the highly promising sector. Lack of technical skills is seen as the biggest barrier to growth, followed by access to debt finance, lack of social enterprise awareness and cash flow constraints. A lack of understanding of social enterprise is seen as a significant barrier to growth. The study shows that donations and grants are the most common sources of funding, with few social enterprises securing concessional loans or equity. The study also found that there is no government approved definition and no nationally recognised definition of social enterprise in Bangladesh. Moreover, there is no specific legal status in Bangladesh which recognise their joint focus on impact and sustainability or profit. This indicates that the sector is in desperate need of greater attention and support from the policy-makers.

Bangladesh has enjoyed economic growth above six per cent over the last decade and has a thriving start-up sector. The consistent economic growth of Bangladesh and its rising geopolitical importance is going to sustain only if the women, the youth, and the underprivileged are afforded opportunities to actively participate in the workforce. Social enterprises, as the study reveals, can be among the major sectors providing that opportunity. However, the sector is in strong need of timely support and recognition, and its potential requires acknowledgement from the policy makers.