Where does social entrepreneurship fit in today's business world?

There is a random saying obsessively used by rap artists that goes; 'If it does not make money, it does not make sense.'

While the origin is loosely traced to the Americans, it has taken various forms closer home such as ‘Mipango bila pesa ni kelele (plans without money is just noise) by Msodoki Young Killer, a Tanzanian rapper, and ‘Kama si pesa au biashara, nani tembea (If it is not about money, take a walk) by Kenyan rapper King Kaka.                              

But this is not how business is conducted in the social entrepreneurship world. While capitalism has wired entrepreneurs that businesses are started for profit, social entrepreneurship is more about impact.

As Vincent Odhiambo says, social entrepreneurship exists to right the wrongs of the market.

“Social entrepreneurs work hard to solve market failures, fix collapsed or collapsing systems, and demonstrate more sustainable models to build inclusive economies,” says Mr Odhiambo.

Mr Odhiambo is the regional director at Ashoka East Africa, which is part of the larger Ashoka global network of social entrepreneurs who are branded change-markers.

One of these change-makers is the renowned social entrepreneur Muhammad Yunus, a 2006 Nobel Peace Prize Winner from Bangladesh who visited Kenya sometime back.

The name Ashoka, he explains, means ‘active absence of sorrow’. It is inspired by Indian Emperor Ashoka, who in the third B.C, renounced violence and became tolerant seeking to pioneer innovations in economic development and social welfare.

Ashoka was founded by Bill Drayton back in 1980 and now boasts the largest network of social entrepreneurs with a community of 5,000 fellows spread across 96 countries, among them Kenya. In East Africa, this figure is about 90 since 2001.

"Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionised the fishing industry,” noted founder of Ashoka.

In a world where profit dictates if and what kind of business one starts, social entrepreneurs flip the equation by looking at impact. If it is not impactful, then it does not make sense.

But doesn’t such a business sound more like Non-Governmental Organisations (NGOs)?

“There are many social enterprises registered as NGOs, others as Foundations or Trusts,” says Mr Odhiambo.

“Regardless of the registration regime, the social entrepreneurship model can apply to traditional for-profit businesses.”

He says what it takes is integrating the Environmental Social and Governance(ESG) mission into the strategy.

“For example, a clearing and forwarding company could decide to build an anti-counterfeit effort creating a new dimension to the work of clearing and forwarding to include awareness creation against counterfeits,” he says. “This would have a positive social impact in the long run.”

He mentions a transport firm of one of the fellows, Naomi Mwaura, which has prioritised the needs of the most vulnerable groups in transportation design among them women.

“Unlike traditional entrepreneurship where success is measured in terms of financial metrics like revenue and profit, social entrepreneurs must also measure and demonstrate their social impact,” he says.

This begs the question, how then does an entrepreneur measure impact?

“Measuring social impact remains one of the trickiest measurements even for well-established global organisations. One can only imagine the challenge for social entrepreneurs who might lack the latest tools, talent, and expertise to carry out this often subjective undertaking,” says Mr Odhiambo.

He mentions the lack of awareness among the general public, policymakers, corporations, and local philanthropy of the field and the unique value proposition it offers as some of the challenges that such business models encounter in the mainstream market that are unique to them.

When Prof Muhammad Yunus came to Kenya in 2023 as a main guest at the first East African social business forum on youth entrepreneurship, the 2006 Nobel Peace Laureate said the continent has become a victim of policy decisions that have not favoured a trickle-down economic growth.

As a result, Africa is at the back of the line when compared with other continents.

The solution, he said, is to redesign systems which should offer a good environment for enterprises that will transform the lives of communities and the continent at large.

“We talked about unemployment in Africa. I think that is an opportunity now. It is because we do not want to be employed. That’s the basic thing. and that’s the message,” said Prof Yunus hinting how social entrepreneurship can be a solution to unemployment.

M Odhiambo details that the challenges listed above like lack of awareness by the general public are the reason why as a society, we are yet to get to the point where we outmatch the world’s most pressing challenges with solutions. Which should be the case, he says.

“This is what social entrepreneurship is about but with the myriad challenges, the sector is seen to be less promising and burdensome,” he adds.

Citing a recently released report ‘State of Social Enterprises 2024’, that documents 10 million social enterprises globally, Mr Odhiambo says the field is growing.

“For the sector to reach its fullest potential, then these challenges must be addressed. It is also incumbent upon the players within the social entrepreneurship ecosystem to build a collaborative, supportive ecosystem and an enabling environment for social entrepreneurs to thrive and deliver on their social impact mission,” he says.

Zana Africa, a business that manufactures sanitary pads, is an example of a social enterprise. The firm, founded by Megan Mukuria, manufactures pads from locally sourced materials to make them affordable.

Ms Mukuria, a Harvard graduate, describes the journey of being a social entrepreneur as lonely. “It was a very lonely journey for a long time,” she says. “But looking back, it does not feel like a 25-year-old journey.”

She thinks that while the world seeks solutions, a key ingredient of social enterprise, it is not patient with the process. Such is a disadvantage to social entrepreneurs.

“You are going against the grain. You are doing something that is solving such a deep problem that a lot of time people cannot understand it and it is hard for them to join because it threatens status quo,” she says.

Positive Exposure, under the stewardship of Jane Waithera, promotes the well-being of persons with albinism while also educating their families and communities on the same.

True North, is another example of a social enterprise run by Lucy Mukuria, a renowned psychologist. Her business looks into innovative ways of integrating former military officers into society. PTSD is a major challenge among veterans.

According to the Social Enterprise Society of Kenya (Sesok), nearly half of social entrepreneurs (44 per cent) are managed by women. The majority of social enterprises in the country are also early state and are managed by youth.

Sesok estimates that there are 44,000 social enterprises in the country.

Capital debt or equity is the leading barrier (54 per cent) for these businesses followed by grants (43 per cent) and technical skills (16 per cent).