For Social Enterprises, The Bottom Line is Impact: Four Lessons About Investing in Social Businesses

Tuesday, September 23, 2014

Despite Cambodia’s rapid economic growth driven by strong exports, private investment and a growing agricultural industry, nearly one in five Cambodians live below the international poverty line. While there are jobs available, they are difficult to get, often don’t pay enough to support basic living costs, and are not secure enough to offer a pathway out of poverty. In 2012, the International Labor Organization (ILO) noted that more than 80 percent of jobs in Cambodia are vulnerable, meaning they are not able to weather fluctuations in demand and capital flows. A part of the solution to create jobs and economic development in Cambodia and other poor countries may be investments by social enterprises.

A social enterprise is an organization that applies commercial strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for external shareholders. Social enterprises can be structured as a for-profit or non-profit, and may take a variety of forms. A new report commissioned by the G8 called, “Impact Investment: The Invisible Heart of Markets” calls for increased investment in this type of impact-driven driven organizations.

Since 2001, one social enterprise in Cambodia, DDD, has created jobs for more than 1000 youth from low-income families with a sustainable business model — and helped them find professional careers with higher incomes. DDD delivers backoffice services to businesses around the world, while offering young people work experience in the digital economy — as well as a chance to complete higher education.

Source: Huffington Post (link opens in a new window)

Base of the Pyramid, impact investing