turning unemployment into entrepreneurship_parveen mahmud

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17TH MICROCREDIT SUMMITGENERATION NEXT: INNOVATIONS IN MICROFINANCE

“Turning Unemployment into Entrepreneurship”

Ms. Parveen MahmudManaging Director

Building Social Business…

Workshop 2

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Grameen Telecom Trust (GTT) was founded in 2010. GTT facilitates and implements social businesses in Bangladesh.

GTT has identified healthcare, education, technology & entrepreneurship development as key areas of social business.

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Our inspiration derives from the proud heritage of Grameen social businesses.

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Our Focus

HealthcareDelivering affordable healthcare services by setting up Health Complex, Health City, Eye Care Hospitals and Cardiac Hospitals

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EducationSetting up nursing colleges, training institutes for medical technicians and other ‘hands on’ and ‘skill focused’ vocational schools and training centres

Our Focus

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Employment generation:For the poor & marginalized communities.

Our Focus

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We provide in-depth support to and incubation of social businesses through

our management team

• Finance and Accounts• Human Resource & Administration• Legal, Regulatory & Asset Management• Project & Infrastructure Development• Social Business• Internal Audit

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What is social business?

A business… is one whose owners are motivated by solving a social problem, often unemployment, rather than making money for themselves.

… different from the non-profit charitable model which has an inherent weakness — its reliance for survival on donations

Profit making, which makes it sustainable…Its revenues cover its costs, or there is a clear business plan to reach break-even within a reasonable timeframe; can be financed by investment, rather than depending on donations.

…but it does not pay dividendsAny income remains with the company to be reinvested. An owner can take out their original investment but no more.

Difference between social business and regular businessA conventional business goes out only to make money, and creates jobs as a byproduct. In a social business for example, the main objective is to generate employment.

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Types of social business

TYPE 1:Any business focused on providing a product and/or service with a specific social, ethical or environmental goal.

TYPE 2:Any profitable business that is owned by the poor and disadvantaged

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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; not profit maximization

Financial and economic sustainability

When investment amount is paid back, company profit stays with the company for expansion and improvement

Environmentally conscious

Seven Principles of Social Business

Investors get back their investment amount only. No dividend is given beyond investment money

Workforce gets market wage with better working conditions

…do it with joy

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Activities of GTT

2. Social Business Learning and Innovation Fund (SBLIF)

1. Nobin Udyokta (NU)/New Entrepreneur

3. Investments and Joint Ventures

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New Entrepreneurship Program Funding and Incubation for businesses of children of Grameen Bank borrowers.

~ Unemployment to Entrepreneurship

Nobin Udyokta Program

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Nobin Udyoktas(NU)New Entrepreneurs

“Turning unemployment into entrepreneurship”

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“We are not job-seekers, we are job-givers”-Turning unemployment into entrepreneurship.

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Definition of New Entrepreneur

• To make the next generation of Grameen Bank members from job seekers to entrepreneurs, New Entrepreneur (Nobin Udyokta) Program has been created.

• The program was initiated in the last quarter of 2013 with a fund of BDT 100 million($ 13 million).

• It is a Social Business for the investors, however, conventional business for the Nobin Udyoktas.

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Who are Nobin Udyoktas(NU’s)

• The children of existing (at least three years) or past (for seven years) Grameen Bank Members.

• Age of the entrepreneur must be between 18-35 years; but the age limit will be relaxed for the females.

• Willing to run a business individually or jointly.

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Methodology

• Primary information collection through Screening Exercise/Workshop in the focused areas.

• Field visit undertaken to verify the information collected from the workshop.

• Meeting with parents(Grameen bank members) of the potential NU’s.

• Based on the field visit business plans are prepared and presented at the Social Business Design Labs for review and approval.

• Once approved from design lab, agreements are signed.• Against the approved budget a bank account is opened on

approved project name and funds are disbursed in tranches.

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• Intention is to transform a job-seeker into a job-giver.• Entrepreneur is established as owner of the business.• For 100 % ownership to NU’s the investors will

recoup/take an amount equivalent to their original investment and NU will pay an additional fixed sum of 20% over it.

• The additional amount is termed as “share transfer fee”.

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NU Reporting:Accounts information system(AIS)/MIS

• NU sends regular operational updates via SMS which are directly stored in the social business monitoring system (SBMS) for NU, a server which assists to analyze & monitor the businesses.

• NUs also send a monthly receipt/payment of their businesses as per the prescribed format.

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On site & Off site monitoring

• Field officers visit the individual business on a regular basis(at least once in a month).

• Panel officers from GTT corporate office also visits the NU businesses to monitor and report on the progress.

• MIS/AIS reports are generated for offsite monitoring• Internal audit carries out their independent field

visits.• External auditors assesses on sample basis.• Communication through phone and skype is also

conducted from the corporate office.

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Capacity building of NU

• Reporting through SMS• Maintaining prime books of accounts.• Trade compliance & regulatory affairs.• Providing relevant training for value addition to

business

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Way forward • Self employment & employment generation beyond family members.

• Enhanced technical knowledge & IT facilities promoting market linkages and e-market platform

•Value chain method followed to make the enterprise profitable and sustainable.

•Emergence of Social Business Village in the focused area with the intensification of NU program, giving it an institutional structure and vision.

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Sector wise NU Breakdown

So far GTT invested in eighty (80) projects and already signed investment agreement with ninety nine (99) Nobin Udyoktas.

NU Report 2 - Sector Wise Investment Breakdown

Sector Wise Approved Investment (BDT)

Investment from Nobin Udyokta (BDT)

Investment from GTT (BDT)

Percentage

NU GTT

Livestock 6,977,000.00

2,020,000.00

4,957,000.00 11.28% 5.99% 17.62%

Livestock - Feed & Medicine 1,265,700.00

640,700.00

625,000.00 2.05% 1.90% 2.22%

Telecom & IT Support 5,701,700.00

3,041,700.00

2,660,000.00 9.22% 9.02% 9.45%

IT Support 4,365,000.00

2,250,000.00

2,115,000.00 7.06% 6.67% 7.52%

General Retail & Wholesale 26,833,900.00

15,258,900.00

11,575,000.00 43.37% 45.24% 41.14%

Clothing, Footwear & Apparel

15,915,500.00

10,210,500.00

5,705,000.00 25.73% 30.27% 20.28%

Crafts 582,000.00

182,000.00

400,000.00 0.94% 0.54% 1.42%

Medicine Business 225,000.00

125,000.00

100,000.00 0.36% 0.37% 0.36%

Total 61,865,800.00

33,728,800.00

28,137,000.00 100% 100% 100%

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Grameen Telecom Trust is planting the seed of development through Social Business for Creating a World Without Poverty

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Contact Information:[email protected]

Visit:www.gtctrust.com

Follow:www.facebook.com/gtlctrust.com

Thank you

mailto:[email protected]

http://www.gtctrust.com/

http://www.facebook.com/gtlctrust.com

turning unemployment into entrepreneurship_parveen mahmud

Economy & Finance

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