A common trait of emerging markets lie in the high share of people living in the “base of the pyramid” (BoP), with less than $8 per day.
Social enterprises are usually defined as “organisations that applies commercial strategies to maximise improvements in human and environmental well-being, rather than maximising profits for external shareholders” (Wikipedia), and they address in most cases the BoP targets.
Said differently, social enterprises innovate in the way they manage to target poor segments of the population, while solving issues in the same time. You may remember how Wecyclers, in Nigeria, helps to solve the waste collection issue while empowering city dwellers and making money with recycling plants.
Filipinos at the base of the pyramid: 25m people living with less than $1/day
The Philippines, with 75% population unbanked and 62% below the poverty line is a large BoP market. During the Geeks on a Beach conference, speakers agreed that social enterprises could be a possible strong asset of the startup ecosystem. Tech-enabled social enterprise both solve issues, scale, and make money.
Some stats show the gap and inequalities:
- 25m people live with less than $1/day, or 25% of the population
- The top 40 families control up to 76% of the GDP
- From 2006 to 2012, there was no improvement in poverty rate
The economy is booming, but the benefits haven’t been flown down to the population. There’s no real philanthropy as well, with oligarchic families not sharing much of the empires they create.
Social enterprises may be part of the solution. The Philippines seem to have part of the ingredients, such as a large market size and a lot of issues to solve, but may be lacking capital and entrepreneurs to become a global hub on this topic.
Three social enterprises from the Philippines: Gawad Kalinga, Rags to Riches and Hapinoy
Gawad Kalinga is the most famous social enterprise in the Philippines. Founded in 2003 by Tony Meloto, their mission is to “end poverty for 5 million families by 2024”. Several programs are helping farmers, child development, reconstruction of houses after natural disasters. They are both socially invested and they “build the nation”, although it is hard to assess the actual impact of the programs.
Rags to Riches works in a different way. A marketplace for craft made with local discarded fabric, it gives a better source of revenue to about 300 women from the Patayas community while fitting into the eco-fashion philosophy. Founded in 2007, it has recycled usefully about 50 tons of waste and have increased the revenues of the women from a few pesos per day to about 12 000 per month.
Hapinoy is taking advantage of the mom and pop’s shop, known as Sari Sari in the Philippines. This NGO, founded by Gawad Kalinda founder’s wife in 2007, is now a network of 3 000 women-entrepreneurs managing these stores. Through mobile technologies, the NGO helps them to better manage their accounts, get access to micro-finance as well as to new products and services.
Overall, the social enterprise sector is one of two with digital currencies where the Philippines could lead the way, as stated in the conversations from Geeks on a Beach.