Image : Anglian Community Enterprise
The Word Bank has just published the 2018 edition of “the Atlas of Sustainable Development Goals”. The 17 SDGs represent the world’s most ambitious plan to promote the sustainable development of our people and planet. This must read document presents maps, charts, and stories related to SDGs. It discusses trends, comparisons, and measurement issues using accessible and shareable data visualizations.
The 2018 edition highlights the progress that has been achieved so far. For example, over 95 million fewer children were stunted in 2016 than in 1990 (SDG 2: Zero hunger) and the number of people living below $1.90 a day fell by over 1 billion between 1990 and 2013 (SDG 1: No poverty).
Yet, there are still tremendous challenges down the road for all SDGs. To illustrate, population growth has outpaced energy infrastructure development in Sub-Saharan Africa, where more people now live without electricity than in 1990 (SDG 7: Affordable and clean energy) and Carbon dioxide (CO2) emissions and its concentration in the atmosphere have been growing steadily (SDG 13: Climate action).
To tackle those challenges, the report recommend providing more and better financing, focusing on implementation, and improving significantly data collection and analysis. Financing social entrepreneurs perfectly fits with the above recommendations.
So, what is unique about social entrepreneurs?
- They constantly seek to innovate: Social entrepreneurs do not look at social and environmental issues from the traditional angle of public, private or non-governmental institutions. They come up with innovative and out of the box approaches to solve the problems they are addressing
- They want to change the world. They are ready to take on new approaches to change the world. Unlike conventional entrepreneurs, they focus on measurable social and environmental impact
- Their projects are self-sustaining. Funding social entrepreneurship does not rely chiefly on philanthropy and government grants. Actually, the projects need to generate revenues, which make the business models more sustainable and above all scalable. Stability is necessary to generate a tangible impact.
Today, in Organization of the Islamic Conference (OIC) countries, social enterprises struggle to raise capital especially in early stages. I believe that Islamic finance institutions are better positioned to close this gap. It is true that “plain vanilla” home and car financings are by far less risky and easier to implement. However, it is possible to structure financing instruments tailored to the needs of social enterprises by building synergies between Islamic finance institutions and Awqaf funds for example. Another possibility is to structure banking deposits with financial and social returns objectives. Such funds can be channeled to social entrepreneurs. If Islamic finance institutions manage to scale similar initiatives, they will not only achieve their target financial returns but they will also strengthen their ethical positioning.
This article was first published in Islamic Finance news Volume 15 Issue 25 dated the 20th June 2018