Grameen Bank managing director Muhammad Yunus has asserted that India is well positioned to tap the huge potential for growth of social business within its existing legal and regulatory framework.
Yunus said social business is a company that is cause-driven and not profit-driven, with the potential to act as change agents for the world.
The Nobel laureate, who addressed industry captains during his two-day visit to Mumbai, told “Enterprenurship and innovative skills are major positives of India. The social business is not a charity as it can be run through raising funds from the market. The surplus generated by the social business is reinvested in the business. In the Indian context, social business can be possible in a number of areas such as water, health, poverty and urban poverty, education and environment.”
He reiterated that India does not need a separate set of rules, regulations and laws for social business to grow. Instead it can do so within the the existing legal and regulatory framework. He added that the opportunities for launching social businesses are limitless. Even profit-maximizing companies can be social businesses when owned by the poor.
Moreover, Yunus made it clear that social business do not need any tax benefits. “The company itself may earn a profit, but the investors who support it do not take any profits out of the company except recouping an amount equivalent to their original investment over a period of time.”