Social & Inclusive Business

The notion of “Social & Inclusive Business” has emerged alongside that of microfinance. It is a hybrid approach that brings an entrepreneurial spirit to bear on the fight against inequality. To ensure the long-term viability of this approach, AFD Group supports all those operating within the ecosystem at the different phases of their development, from establishing and growing the sector to strengthening its institutional framework.

Social & Inclusive Business brings together economic stakeholders, including not-for-profit organizations and businesses, that put social and/or environmental development front and centre of what they do. AFD Group aims to promote this hybrid approach and boost its impact on people and the planet. Its initiatives to promote the growth of Social & Inclusive Business target stakeholders (from start-ups to big businesses), technical support organizations, funding bodies and political decision-makers.
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AFD Group and Social & Inclusive Business: combining entrepreneurship and sustainable development goals

1. Social and inclusive projects

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Social and inclusive projects

Social & Inclusive Business is driven by private- and public-sector stakeholders whose raison d’être is to make a positive social and environmental impact, from start-ups to local businesses, multinationals and non-governmental organizations (NGOs). To do this, they adopt a hybrid approach, come up with innovative models and develop internal structures that are in line with their objectives.

AFD Group has established a specific approach to encourage and support all Social & Inclusive Business stakeholders and their innovations. By supporting these organizations, we are helping to create development that brings greater social, economic and environmental value, by combining entrepreneurship with sustainable development goals and the fight against inequality.

AFD Group has been supporting “social business” since 2015. The term is used to refer to organizations that have a clear social and/or environmental purpose and sustainable business model, whose internal structure reflects their objectives (e.g. their governance, use of profits and HR policies). Inclusive businesses incorporate those at the “bottom of the pyramid” into their value chain, whether as customers, distributors or suppliers. Such individuals live on less than eight US dollars a day and have little or no access to basic goods and services.
 

2. Activities supporting disadvantaged groups

Cliente d'Enda

Activities supporting disadvantaged groups

Promoting the inclusion of those at the bottom of the pyramid in a wide range of sectors, from education to health, food and even energy and water, is not only a way of establishing a fairer, more inclusive economy; it also creates major economic prospects for those seeking customers or business opportunities.

AFD Group supports Social & Inclusive Business projects that make it easier for disadvantaged groups to access basic goods and services. For example, we are helping to reduce infant malnutrition in Madagascar by supporting the development of the Nutri’zaza initiative. We are also trying to improve access to water by working alongside operators such as the Phnom Penh Water Supply Authority (PPWSA), as well as to make health care more widely available, particularly in sub-Saharan Africa, by supporting entrepreneurial projects with a social objective, such as the Medical Credit Fund (MCF).

We also support microfinance actors such as Enda Tamweel in Tunisia who participate in the financial empowerment of disadvantaged populations.

3. Getting Social & Inclusive Business projects off the ground

PRO-JKENYA-SANERGY-FEMME-ENFANTS-2015

Getting Social & Inclusive Business projects off the ground

AFD encourages the creation of Social & Inclusive Business projects through our annual “call for initiatives”, which aims to identify and support social and inclusive start-ups in a range of countries, using local intermediaries as incubators. The first project to win AFDIBA (AFD for Inclusive & Digital Business in Africa) funding kicked off in 2019. The aim is to identify, support and fund inclusive start-ups working with digital technologies in Burkina Faso, Ghana, Morocco and Senegal. The programme has been allocated €2.1 million in funding, 95% of which comes from AFD Group. The 60 successful applicants take part in a programme designed to fast-track entrepreneurs who are using digital technologies to achieve social objectives. 

AFD is also funding entrepreneurial projects through the Investment and Support Fund for Businesses in Africa (FISEA), which is advised by Proparco. For example, in 2015, the FISEA invested in the Novastar East Africa fund, which supports entrepreneurs in East Africa who are developing basic services for the very poorest in sectors ranging from education to health, food and water. The fund supports businesses such as Sanergy, which installs toilets in Nairobi's urban slums.

AFD and Proparco also support organizations with structuring their Social & Inclusive Business projects. The team at the Development Campus organizes an annual boot camp in Marseille with the aim of bolstering start-ups and rooting them within their communities. Each year, we also hold our Social & Inclusive Business Camp, a networking programme for entrepreneurs. With all these events, we place particular emphasis on approaches that promote gender equality.
 

4. Helping Social & Inclusive Business stakeholders to grow

Femme dans une usine de textile en train de travailler

Helping Social & Inclusive Business stakeholders to grow

AFD Group supports economic stakeholders who have ideas for Social & Inclusive Business projects with the aim of guiding them towards a more inclusive approach and helping them to grow. We achieve this by granting loans that come with technical support (where appropriate), providing guarantees for investors and investing in businesses.

AFD Group provides financial backing to:

  • businesses that want to adopt a more inclusive approach;
  • businesses whose approach is already inclusive that are seeking support with the next phase of their growth;
  • investors and financial backers who want to step up their involvement with social and inclusive businesses.

5. Promoting the development of an institutional framework that fosters Social & Inclusive Business

Pakistan, microfinance - Rahim Bibi, femme commerçante

Promoting the development of an institutional framework that fosters Social & Inclusive Business

A suitable institutional framework is key to ensuring that Social & Inclusive Business initiatives can be developed sustainably. This framework must cover aspects such as regulation, the general business environment and taxes. AFD Group promotes the implementation and strengthening of such a positive framework (e.g. legal and tax frameworks, the adoption of common definitions or the establishment of labels) by helping to structure advocacy channels and supporting public-sector stakeholders.

1 Billion euros
to be granted over 5 years (2019-2023)

OUR COMMITMENT:

At a time when we are seeing the rise of a generation of entrepreneurs devoted to ensuring their businesses make a positive social impact, AFD Group is stepping up its support of Social & Inclusive Business in developing countries. AFD’s previous initiative, which was launched in 2015, resulted in a total of €163 million being granted to support 50 Social Business projects.

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