The Asian Development Bank is looking to prepare and release a plan to further boost its engagement with inclusive businesses — private investments that aim to reach the bottom of the pyramid by providing them with much-needed social services, jobs or economic opportunities.
Unlike social enterprises, inclusive businesses are greater in scale and realize higher revenues. But unlike CSR activities, they have a broader social impact. As such, inclusive businesses are often regarded as a viable approach toward inclusive growth and sustainable development.
ADB, however, has yet to fully leverage inclusive business’ potential. In 2013, just five of 16 private sector projects the bank approved qualified as inclusive business. There are several reasons for this, including the fact that very few of the business plans submitted to the bank for review are financially viable.
But ADB does recognize inclusive business’ growing contributions to inclusive and sustainable development, and has started to take steps to increase engagement with these enterprises.
“Our work has increasingly turned toward engagement with — and promotion of — inclusive businesses, some of which can be social enterprises with prospects of scaling up,” Bart Edes, director of the Manila-based bank’s social development, governance and gender division, told Devex. “ADB has invested in several inclusive business ventures since 2011, and we expect to approve more in the next year.”
The bank official added that the Inclusive Business Action Plan, which will be launched in the first half of the year, will “highlight ways in which ADB could further expand its work in inclusive business.” This includes providing assistance to ease the process of doing business, and to encourage more entrepreneurs to invest in these socially aware ventures.
But despite plans to increase bank engagement with inclusive businesses, Edes said hiring experts to work exclusively on helping this sector grow is not yet in the pipeline.
“We are collaborating very closely with many individuals and organizations to stimulate investment in this area,” he concluded. “We see inclusive business as a part of ADB's overall efforts to support inclusive growth in our developing member countries.”
What are your thoughts on inclusive business and its perceived contributions to inclusive and sustainable development? Let us know by leaving a comment below.
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