Concurrently, the consumer Price Index (CPI) climbs by 2.8 per cent (May 2022), adding to food inflation at 5.2 per cent. Though the government has doled out billions of ringgits to tackle this pandemic and its aftermath, people at the bottom of the pyramid seemingly are experiencing tremendous hardship. Besides, the untoward global issues such as the war in Ukraine, the recurring Covid outbreak in China, and a domestic resurgence, intensify the vulnerability of businesses, households, and corporate sectors while slowing down recovery actions.
Several states, notably Kedah, Perlis, Kelantan, Sabah, and Sarawak, have higher poverty incidences. Assumingly, many other socioeconomic issues such as school dropout, early marriage and adolescent pregnancy, income inequalities, domestic violence and divorce, gender discrimination, child labour etc., might have taken birth due to this pandemic.
The government has taken various positive measures and initiatives to rejuvenate the economy, including industry disclosure, border reopening, lifting out mobility control, etc. In the same vein, the current budget allocates multi-billion cash handouts to assist the poor and create jobs. Bank Negara Malaysia (BNM) initiated the Targeted Relief and Recovery Facility (TRRF) programme for affected SMEs in the services sector. The economic wheels of this country are seemingly moving forward. According to the Department of Statistics, from -5.5 per cent in 2020, Malaysia’s GDP growth trends upward to 3.1 per cent in 2021 and 5.0 (Q1) in 2022.
The TRRF programme extends RM 8 billion to affected SMEs in the services sector. The current budget allocates RM 8.2 billion in cash handouts to 9.6 million poor households and individuals. About five billion-ringgit Malaysia to create 600,000 new jobs. This budget also gives RM 31 billion to subsidise and incentivise people. However, it will inflate the debt size overmuch 1 trillion ringgit in 2022.
Suggestively, among other rejuvenation initiatives, the Yunusian social business model (Which is called Yunus Social Business) could be incorporated as a tool to viably address many social ills. Worth mentioning that Grameen Bank’s (Bangladesh) founder Nobel Peace Laureate Professor Muhammad Yunus, who is also the inaugural Chancellor of Albukhary International University (AIU), Malaysia conceptualised this business model with the vision of building a world with three zeros: zero poverty, zero unemployment, and zero net carbon emission. Yunus Social Business (YSB) is a social consciousness-driven, robust and self-sustaining business model which reinvests the profit to amplify the social impact by solving challenges or creating job opportunities through business expansion.
YSB models are of two types.
YSB1: “focuses on businesses dealing with social objectives only.”
YSB2: “can take up any profitable business so long as it is owned by the poor and the disadvantaged, who can gain through receiving direct dividends or by some indirect benefits.”
Nevertheless, Yunusian social business is proven effective in social value creation based on seven (7) operational principles that include employee value proposition (EVP), gender-balanced and environment-friendly while being mission-driven and joyful.
Seven operational principles of social businesses:
- Business objective will be to overcome poverty or problems (such as education, health, technology access, and environment) that threaten people and society, not profit maximisation.
- Financial and economic sustainability.
- Investors get back their investment amount only. No dividend is given beyond investment money
- When the investment amount is paid back, company profit stays with the company for expansion and improvement.
- Gender-sensitive and environmentally conscious.
- Workforce gets market wage with better working conditions.
- ...do it with joy.
YSB (1) model adopts a non-loss, non-dividend approach to address specific social problems while remaining financially self-sustainable. The profit must be reinvested within the business for its expansion. Investors can recoup only the net amount of capital after a certain period. Notwithstanding, since only benevolent wealthy individuals or firms provide the seed money for such noble ventures, the financial stream remained uncertain and insufficient. Therefore, the mooting question is where to get the spontaneous capital flow for the Yunusian social business. Some potential sources are depicted hereunder.
Since the government responsible for public well-being and social welfare should provide social business seed funds using tax revenue. In the same vein, some Islamic financial instruments, such as Islamic social funds, Zakat (almsgiving), Waqf (endowments), Sadaqah (charity), and Qard Hasan (interest-free benevolent loan), can be incorporated into the social business paradigm. Though these funds are mainly utilised to meet immediate humanitarian needs like hunger, healthcare, clothing etc., they will generate greater social impacts if invested in YSB.
Qardul Hasan is used for lending purposes with no surplus return or dividend suitable for financing YSB (1). Even though unleashed with the principle of the time value of money, this financial product can create significant economic value if invested in social business. Islamic banks could offer this financial scheme as part of their corporate social responsibilities.n the same way, wealthy people too could extend their hands to this pursuit. The government could institutionalise Qardul Hasan to finance social business ventures in this regard. The fund should be guaranteed with a no-tax provision. That means funders will get back the money after a promised period with a complementary tax redemption.
One frequent saying of Professor Yunus is worth quoting, “A charity dollar has only one life; a Social Business dollar can be invested over and over again.” That implies the reiterative uses of charity funds in social business can optimise their usefulness by adding more value to society.
Since the YSB2 model allows poor people to own the business and consume dividends, Islamic social funds such as Zakat, Waqf, and Sadaqah could be incorporated within its context. Microfinance institutions are examples of this model, creating jobs and benefiting the poor. Corporate social responsibility (CSR) funds could be another potential source for practising YSB. National and international firms may come forward with their CSR budget to invest in YSB to create more impact on society while earning higher social acceptance and reputation.
Some Yunus Social Businesses, such as Grameen Dannon, Grameen Veolia, Grameen Caledonian College of Nursing, Grameen GC Eye Care Hospital, Otto Grameen Trust, Grameen Reebok, Grameen Intel, Grameen Yukiguni Maitake, Grameen Felissimo and many more can be exemplified. They are significantly contributing to solving critical socio-economic and environmental problems in Bangladesh.
For instance, Grameen, in collaboration with the Parish-based American French multinational corporation Dannon, debuted Shokti+ (Energy plus), fortified yoghurt to address rural children’s malnutrition. Notably, according to WHO, 40% of young children (aged below five) in Bangladesh suffer from anaemia. This organisation has reached more than 300,000 benefactors while creating 350 jobs and improving the financial status of more than 500 households (milk suppliers). Grameen Veolia, another Grameen collaboration with a French transnational company, Veolia serves pure drinking water to thousands of people to protect them from arsenic contamination. It is worth mentioning that at least 20 million Bangladeshis are exposed to arsenic poisoning.
Another noble venture, Grameen Caledonian College of Nursing (GCCN) established by Grameen Healthcare Trust in collaboration with the NIKE Foundation and the Glasgow Caledonian University of Glasgow. This institute offers quality nursing and midwifery education to young girls from rural villages to eliminate the cycle of early marriage, pregnancy, and poverty. Grameen GC Eye Care Hospital specialises in cataract operations, with a capacity of 10,000 operations per year, saving thousands of people’s vision. From 1 November 2007 to 30 June 2020, Grameen GC rendered services to 936,991 patients, and among them, 256,938 destitute patients were treated free of charge, including 4,194 cataract surgeries. Ophthalmologists, ophthalmic assistants, and hospital staff are experienced and trained by Aravind Eye Hospital, India and SEVA Foundation, USA. These organisations are not only solving critical social issues and earning social reputations but also remaining operationally self-sustained in the competitive market.
Malaysia has been fostering the Yunusian social business model since 1987 by establishing Amanah Ikhtiar Malaysia (AIM) and Yayasan Usaha Maju (YUM) (replications of Grameen Bank). AIM provides microcredit services in Peninsular Malaysia, Sabah, and Sarawak, while YUM focuses on the poor community in Sabah only. These two institutions have significantly contributed to poverty reduction and women empowerment.
In academia, Albukhary International University (AIU) has embraced Yunus Social Business as its niche. Currently, AIU is harbouring underprivileged students from 56 countries. Albukhary Foundation has provided them with scholarships that cover tuition fees, accommodation, and meal allowances. This university offers social business courses exclusively designed with theories and practices. The sole purpose is to enable graduates to implement this business concept in amenable communities.
Six other Malaysian universities, namely, Universiti Kebangsaan Malaysia (UKM), Universiti Putra Malaysia (UPM), Universiti Sains Malaysia, Universiti Teknologi Petronas, INTI International University, and Sunway University, have established Yunus Social Business centres to flourish and popularise this business concept.
The Malaysian Global Innovation & Creativity Centre (MaGIC) could take measures to promote and patronise social businesses the same way it supports social enterprises. Similarly, since Islamic finance is rising in this country in an institutional setting, YSB could be further nourished with Islamic social funds. Based on the above discussion, it can be concluded that Malaysia is a suitable place to cultivate Yunusian social business. This initiative might help rejuvenate the pandemic-beaten society more viable and sustainable manner.
Authors Biography: Dr Reazul Islam is a lecturer and researcher at the School of Business and Social Sciences (SBSS), Albukhary International University (AIU), Malaysia.
