BRAC Enterprises & Investments

An Overview
What is Social Enterprise
A Social Enterprise is a business venture that aims
to achieve financial returns while fulfilling social,
environmental and/or other developmental goals. Social
enterprises can be non-profit, low-profit or for-profit
organisations as long as their social and environmental
missions are fulfilled. Typically, social enterprises serve
as a means to provide financial solvency to the low
income populations while ensuring that the social
obligations such as alleviation of poverty, illiteracy,
diseases, environmental impact etc. are met. That is why
social enterprises are considered alternative business
models with a double or triple bottom line, i.e. they have
the obligation to combine financial sustainability with
social and/or environmental missions.

Why is Social Enterprise

Important
Social enterprises provide market access to small-
scale, fragmented suppliers and help them become
self-sufficient entrepreneurs by creating jobs, increasing
income and generating surplus. The target of social
enterprises is typically the low income population with
entrepreneurial skills who either lack the resources and
capacity to supply enough products in order to capture
the monetary value of the existing market demand,
or they do not have access to a large enough market
where they can sell and profit from their productions.
Social enterprises act as an intermediary that bridges
the gap between existing market need and efficient
supply. Social enterprises can provide capital, training,
education, capacity, governance and awareness, to
name a few resources, and bolster the value, efficiency
and volume of the supply chain, and as a result facilitate
financial stability. Additionally, social enterprises may
act as a retail or distribution outlet and thus ensure
a profitable exit mechanism for the of suppliers’
production volume. Social enterprises help increase the
local suppliers’ productivity as well as income level and
enable them to break out of the viciously repetitive cycle
of poverty and become self-sustaining entrepreneurs.
Increased Small
Skills and Capacity Social Enterprise
Enterpreneures

Low Local

Social Enterprise
Income Suppliers

Social Enterprise
Untrapped
Market
Limited
Market Limited
Access Capacity

Greater Increased
Market Access Social Enterprise Income

THE ROLE OF A SOCIAL ENTERPRISE

BRAC Enterprises:
creating surplus with an alternative
mission
In 1978, BRAC’s flagship social enterprise, Aarong, was
created as a support mechanism to BRAC’s existing
sericulture programme. BRAC’s sericulture initiatives had
proven an effective way to engage poor, rural women
in productive income generating activity. However, the
livelihoods of these women could not be sustained on
a continual basis, unless the hand-spun silk they were
creating could be successfully marketed at a larger
scale. So Aarong was established as a retail distribution
outlet that offered a fair price to the rural suppliers while
introducing the products to urban markets where both
demand and consumers’ willingness to pay were the
highest. Today, Aarong has transformed into a high
surplus generating enterprise, operating as one of the
largest retailers in Bangladesh with 11 domestic outlets
while supporting over 65,000 Bangladeshi artisans
across more than 2000 villages – proving that an
enterprise can be profitable while maintain its social and
environmental commitments.

Other BRAC enterprises also came into existence at

various times in similar efforts to create economic space
for the poor. Although most of the BRAC enterprises
were formed as programme support enterprises,
majority of them currently operate as surplus generating
ventures while maintaining their ongoing commitment
 toward alleviation of poverty via empowerment of the
poor.
Today BRAC operates 18 financially and socially
profitable enterprises, across health, agriculture,
livestock, fisheries, education, green energy, printing
and retail sectors, making significant contribution to
local economy through creation of market linkages,
entrepreneurs and employment opportunities. BRAC
enterprises no longer just serve the immediate purpose
of supporting development programmes and creating
market access – they maximise and monetise market
opportunities. The current surplus generating model of
BRAC’s enterprises concurrently achieves scalability,
greater outreach and maximum impact. By targeting
profitable and scalable businesses, BRAC enterprises
are able to fulfill their social missions at a much greater
scale while increasing financial surplus that reduce the
organisation’s donor dependency and support BRAC’s
developmental programmes and other innovations at a
greater level. Upon ensuring fair price to local suppliers
and fostering entrepreneurship and employment at the
grass root level, BRAC enterprises focus on successful
marketing and distribution in the urban and rural
markets and extract generate the maximum surplus
that consumer demand would allow. In most cases,
BRAC enterprises end up creating new opportunities
in an un-served/under-served market, which creates
space for new entrants to the market and fosters healthy
competition. That is why BRAC enterprises continue
to exist, expand and innovate through across multiple
sectors.

BRAC Enterprise
● Surplus generating
businesses
● provides greater
Programmes Support market access and
generates large scale
Enterprise
surplus
● Support Programme
● Increases BRAC’s
● Provides market
capacity to support
access and exit
the programmme and
mechanism to goods
enterprises
produced through
BRAC Programmes BRAC programmes
● Non-profit
● Aims to alleviate
poverty

EVOLVEMENT OF BRAC ENTERPRISES

 The BRAC Ethos of
Social Entrepreneurship,
the “3Ps”: People, Planet, Profit
Through its collaborative network of enterprises,
development programmes and investments, BRAC has
pioneered a unique model that advocates for business
sustainability as “doing well by doing good”. BRAC
Enterprises strive to strike the right balance between
financial surplus and social returns in order to achieve
the targeted double/triple bottom lines. By operating as
a surplus generating organisation that aims to alleviate
poverty through its business operations and supply
chain, BRAC succeeds in implementing its vision to
serve the society in a profitable manner.

Where is
THE RIGHT BALANCE

COMMERCIAL BUSINESS SOCIAL ENTERPRISES

SUSTAINABLE

EXPLOITATIVE BUSINESS: IDEALISTIC ENTERPRISE:

The total-profit motive only public-good motive

BUSINESS MOTIVE SUSTAINABILITY

BRAC’S VISION OF A PROFITABLE, SOCIAL ENTERPRISE

Although all of the BRAC enterprises are committed

toward achieving financial, social and environmental
returns, BRAC takes a unique approach in defining its
triple bottom line by focusing on three ethoses: people,
profit and the planet (the “3Ps”). A BRAC enterprise
must meet three criteria in order to be considered a
successful and sustainable business:
● It must serve the needs of poor people
● It must be environmentally friendly, and
● It must make surplus to help keep BRAC’s
development works sustainable
 BRAC does not have any shareholders. Instead, BRAC
Enterprises’ efforts are driven towards maximising
financial and social benefits of its stakeholders who are
primarily the millions of deprived and disenfranchised
poor of the country that BRAC aims to serve – a fact
that clearly distinguishes BRAC’s social entrepreneurship
from its other commercial peers. The financial surplus
from BRAC enterprises are split two ways, 50% goes
toward BRAC’s core fund to support BRAC itself along
with its expenditures and the remaining 50% surplus is
reinvested in the BRAC enterprises themselves.

People

Planet Profit

BRAC ENTERPRISES’ TRIPLE BOTTOM LINE

Objectives of BRAC Enterprises

BRAC takes a holistic approach in conceptualising and
developing each of its enterprises. As BRAC enterprises
have expanded from programme support mechanisms
to surplus generating enterprises with financial and
social missions, each enterprise has ensured that it
complies to the four fundamental objectives of a BRAC
enterprise:
● Creating job opportunities
● Generating surplus for BRAC in order to minimise
donor dependency
● Ensuring long-term support and contribution
toward the sustainability of BRAC’s development
interventions such as microfinance, education and
skills development etc.
● Becoming viable investments in the long run in
order to act as ‘hedge’ against future liquidity
crises and donor dependency
 BRAC Enterprises BRAC Investments

Create inclusivity,
Create synergy access to
Generate Develop in conjunction financing, reduce
surplus Sustainable with donor dependency
Enterprises Development and hedge against
Create Interventions liquidity crisis
jobs/livelihood

• Microfinance
• Education
• Skills Training

BRAC’S HOLISTIC APPROACH TO ENTERPRISE DEVELOPMENT

The “BRAC Model”

The unique model under which BRAC enterprises
operate has evolved as completely home-grown and
in isolation from the international dialogue regarding
social enterprises. The “BRAC model” comprises of a
collaborative network of Enterprises, Development
Programmes and Investments – all of which together
serve the comprehensive vision and objective of BRAC,
i.e. to empower the poor, alleviate social/environmental
imbalance and enhance financial sustainability. The
BRAC Development Programmes are dedicated
toward fulfilling BRAC’s social and philanthropic missions
and are run as fully-funded, non-surplus ventures.
While the BRAC Enterprises are mostly incepted as
a support mechanism that allows the development
programmes to be sustainable, the surplus-generating
model of the BRAC Enterprises allow for 50% of
the surplus from the enterprises to support BRAC’s
expenditures, including Development Programmes
that are often run at very high costs, and the remaining
50% to be re-invested in the enterprises themselves,
and as a result reduce the need for external funding.
The BRAC Investments unit comprises of financially
profitable investments and financial service businesses
that are geared toward generating financial returns
while adhering to underlying socially responsible
 causes such as low-income housing, microfinance,
small enterprise loans, information technology, clean
development mechanism (CDM) etc. Dividends from
BRAC Investments support the financial sustenance of
both BRAC Enterprises and Development Programmes
by acting as a hedge or safety net against future
liquidity crisis. The synergetic effect of this integrated
model has contributed significantly in reducing BRAC’s
dependency on donors and external funding. Currently
27% of BRAC’s overall financial needs are fulfilled by
various donation/external sources while the remaining
73% is financed internally by BRAC from the surplus of
its enterprises and the dividend from its investments.
By continuing on this model, BRAC’s goal is to become
100% self-financed in future.

Banking with SME focus Housing Finance

BRAC
Asset Management Mobile Banking
Investments
Investment Banking &
Internet & Software
Stock Brokerage

Social Mission Hedge against liquidity crisis

Financing Support
Financing Support
Social Mission

Health Retail
BRAC
Livestock & Fisheries Green Enterprises
Enterprises
Agriculture & Food Printing & Packaging

Marketable Goods Large-Scale Market Exit

Social Mission Financial Sustainability

Health Community Human Rights

BRAC Empowerment
Development Food & Gender
Education
Agriculture Equality
Programmes Social
Finance Environment
Advocacy

THE “BRAC MODEL”

The BRAC Advantage

Through its unique model and integrated operations,
BRAC achieves five distinctive advantages across its
enterprises.
● Synergy
● Cross Collaboration
● Cross Subsidy
● Continuous Innovation
● Holistic Support
 Synergy: The 2+2 = 5 Effect
The integrated network of BRAC Enterprises,
Development Programmes and Investments together
beget a unique synergy and essentially creates a 2+2=5
Effect. BRAC development programmes typically serve
as inspirations and opportunities to identify ‘gaps’
where BRAC enterprises can come in and increase the
productivity of people, assets, generate surplus for the
organisation, create job opportunities and provide a
better quality of life for poor people and the communities
they are from. For example, the BRAC Sanitary Napkin
& Delivery Kit enterprise was launched in response to a
observation that significant number of young women in
BRAC Schools would miss classes during menstruation
period, or drop out during early pregnancy, due to lack
of basic sanitary products. This enterprise became
successful and its products became viable through
BRAC’s primary distribution channel of its existing
enterprise and programme members.

The surpluses generated by the social enterprises

make BRAC more self-sustaining, allows financing of
innovative pilots and help grow the business itself so
that increasing numbers of poor people can become
self-reliant. The dividends from BRAC Investments
contribute toward financial sustenance of both BRAC
Enterprises and Development Programmes. This
synergetic approach as a whole maximises BRAC’s
impact and contribution toward poverty alleviation.
● Synergy
● Cross Collaboration
● Cross Subsidy Returns on investments
● Continuous Innovation reduce donor dependency
● Holistic Support

50% of enterprise surplus

supports BRAC’s
Expenditures including
development programmes

Socially For-Profit Non-Profit

Responsible Social Development
Investments Enterprises Programmes

50% of enterprise
surplus is
reinvestad and
cross-subsidizad
across the
Returns on investments enterprises
provide hedge against themselves
future liquidity crisis THE BRAC ADVANTAGE
 Cross Collaboration:
BRAC enterprises maximise synergy, impact and value
by their targeted outreach and integrative products
and services across multiple enterprises. For example,
BRAC’s microfinance or Targeted Ultra Poor (TUP)
programme may allow a poor villager to own a cow and
produce/sell the milk. BRAC Feed Mills can offer the
nutrition required to tend for the cow while BRAC Dairy
can ensure that the villager can supply milk sustainably
and receive fair market price. Additionally, BRAC Artificial
Insemination Programme can step in to train the villager
to breed more cows and thus produce more milk and
cattle and move further ahead in the path to financial
solvency.

The A village members

receives loan from
BRAC trained a cadre
of ‘feed sellers’ who
prepared HYV feed and
BRAC Dairy buys milk
froms farmers, helping
them access markers
BRAC to run small, sell it to poultry rearers.
income-generating and providing them with
BRAC also built 3 feed

2
operations. a fair price for their
mills that produce
efforts.
balanced feed

She buys good Her cows She sells She gets a

VO member She buys cow Quality feed produce fair price
the milk

+
takes out with the loan from a BRAC milk and for the
to BRAC
loan ‘feed seller’ meat milk

New

2
She breeds generation
the cow of cows
with hybrid produce more
cow semen milk and meat

= An
enterpreneur
takes artificial
insemination
He buys
hi-quality
bull semen
from
He sells
insemination
services
courses from

5
BRAC BRAC

Artificial inseminators offer ‘door-to-door’

BRAC established a bull artificial insemination services and educate
BRAC trains on artificial and buck station in farmers on housing, feeding, water
insemination Mymensingh to provide management, disease prevention, cattle

Effect farmers access to hybrid

bull semen
breed selection and milking of livestock.
helping to educate and raise awareness
amongst the local community.

AN ILLUSTRATION OF CROSS-COLLABORATION AND SYNERGIES ACROSS BRAC ENTERPRISES

Cross Subsidy:
Although BRAC enterprises aim for financial returns
while fulfilling the social and environmental missions,
not all enterprises are equally profitable. Aarong, for
example, is one of BRAC’s most profitable enterprises.
BRAC Sericulture on the other hand is running at or
below cost, creating low or no surplus. The cumulative
surplus from BRAC enterprises combined are used
to re-invest in the BRAC enterprises and support the
development programmes, on an as needed basis,
not on a pro-rata basis across enterprises. This allows
a highly beneficial cross-subsidy model where the
profitable enterprises are able to support the non/less
profitable enterprises. Moreover, closing of an enterprise
due to lack of profitability and subsequent job losses can
be prevented while the different social and environmental
missions across the enterprises continue to be fulfilled.
For example, in 2009, BRAC Dairy was faced with the
need to in order to remain a viable enterprise and had
considered mechanising some of its production lines.
But that would end up in considerable number of job
losses and close down of unprofitable milk-chilling
stations in ultra poor areas. So instead, BRAC invested
in 16 of these chilling stations and increased their
capacity by 5%-15%. Because of BRAC’s integrative
network support and operational model, such measures
were possible.

Continuous Innovation:
BRAC’s extensive network of enterprises with the
capacity to address major social needs allows BRAC to
continually identify needs and create innovative solution
to fulfill that need and create necessary market linkages.
For example, in response to the severe iodine deficiency
observed among the members of BRAC’s health
programmes and concurrent lack of hygienic iodised
salt in the market, BRAC created a salt enterprise,
BRAC Salt, in order to help fulfill the need for iodised salt
throughout the country. In the subsequent years though,
primarily due to increased number of new entrants to
the market, BRAC Salt started to lag behind in terms
of creating surplus, and termination of the enterprise
became a possibility. Instead, BRAC focused on an
innovative way to utilise its surplus salt production by
producing a salt-based, high-nutrient cattle feed called
Minamix. This product innovation not only proved
financially profitable but also allowed BRAC to retain its
employees and entrepreneurs and redirect their skills
and resources toward a sustainable enterprise.
Holistic Support:
Because of its integrated network and unique model,
BRAC has the advantage, ability and capacity to
provide holistic support and truly take care of its
stakeholders, i.e. the entrepreneurs involved with the
BRAC enterprises. For example, in 2011 due to market
infeasibility, BRAC was compelled to shut down its
Sanitary Napkin and Delivery Kit operations in Chinmari,
an area that comprised of ultra poor members with very
little or no entrepreneurial skills. Instead of terminating
these people and leaving them in abject poverty, or
providing them with cash severance that they had no
knowledge of how to invest or protect, BRAC enrolled
these people under BRAC’s Targeted Ultra Poor (TUP)
programme. Under TUP, each of these people were
given Taka 10,000 worth of assets such as cows
and chicken, were provided education, training and
resources to take care of their animals and were even
provided training under BRAC’s artificial insemination
programme. As a result, each of these BRAC members
was given the opportunity to remain on track for financial
solvency and increase their capital and skills in the
process, instead of getting lost in abject poverty and
unemployment.
 BRAC Enterprises at a glance:

BRAC
Enterprises

Livestock Agriculture Printing

Health Retail Green
& & &
Enterprises
Fisheries Food Packaging

Sanitary Napkin
Aarong Poultry Rearing Cold Storage Sericulture Printers
And Delivery Kit
(1978) (1978) (1980) (1978) (1977)
(1999)

Poultry Tea Estate nursery Printing Pack

(1996) (2003) (1994) (2005)

Fisheries Salt Solar

(1998) (2004) (1998)

Recycled
Dairy
Handmade Paper
(1998)
(2000)

Biogas (Pilot)
Feed Mills
(2009)
(1999)

Artificial
Insemination
(2000)

Chicken
(2001)

BRAC ENTERPRISES BY SECTORS

Next Steps
The next step for BRAC enterprises is to continue
capturing new opportunities in existing and new
sectors that will further the mission and vision of BRAC.
Through continuous identification of new opportunities
and innovation of new products BRAC will continue to
create interventions that address social needs, fosters
social equality and justice and alleviates poverty. In that
light, the immediate next focus of BRAC enterprises
is toward environmentally sustainable sectors such
as carbon emissions, nursery, clean energy and clean
water. Concurrently, BRAC Investments is also focusing
its efforts toward creating financial sustainability through
impact investing, equity sponsorship of small to
medium sized companies, financing of innovative social
entrepreneurial ventures etc. which further enhances
the potential of new enterprise creation and sustainable
development.
Frequently
Asked
Questions
What is a Social Enterprise?
A Social Enterprise is a business venture that aims
to achieve financial returns while fulfilling social,
environmental and/or other developmental goals.
Typically, social enterprises serve as a means to provide
financial solvency to the low income populations while
ensuring that the social obligations such as alleviation
of poverty, illiteracy, diseases, environmental impact etc.
are met. That is why social enterprises are considered
alternative business models with a double or triple
bottom line, i.e. they have the obligation to combine
financial sustainability with social and/or environmental
missions.

Are Social Enterprises same as
non-profits?
No. Social enterprises can be non-profit, low-profit or
for-profit organisations as long as their underlying social
and environmental missions are fulfilled and as long as
the social/environmental goals are just as instrumental (if
not more) for the business as its financial goals.

Are BRAC Enterprises non-
profit?
No. BRAC is a non-government organisation (NGO)
that runs Development Programmes, Enterprises
and Investment programmes. BRAC Development
Programmes are purely non-profit and run with
BRAC’s internal funds or external donor funds. BRAC
Enterprises are all incepted as interventions in order
address an existing social need and are dedicated
toward alleviation of poverty; however, they are run as
businesses with profit maximising potential. Some of
the enterprises are run at/below cost, such as BRAC
Sericulture, whereas other enterprises such as Aarong
have evolved into highly surplus generating ventures by
fulfilling greater urban market needs. However, BRAC,
the NGO, does not distribute any part of the profit to
any shareholders. Instead, BRAC aims to serve its
stakeholders, i.e. the targeted low-income population,
and therefore, reinvests 50% of the financial profits
from BRAC’s enterprises in the non-profit development
programmes such as education and healthcare. The
remaining 50% of the enterprise profits are reinvested
in the BRAC enterprises themselves on an as-needed
basis. The profitability of a commercially successful
enterprise therefore cross-subsidises the less or not
profitable enterprises. BRAC Investments consist
of surplus generating, strategic investments seeking
financial returns while fulfilling underlying social/
philanthropic missions. For example, BRAC Bank
operates as a conventional bank but provides loans to
small and medium enterprises, BRAC-Delta Housing
Finance Corporation provides financing for low-income
housing.

Are BRAC Enterprises Social
Enterprises?
BRAC can be best described as a surplus generating
social entrepreneur that combines surplus with
sustainability in order to alleviate poverty. Through
each of its enterprises, BRAC aims to fulfill three
criteria, referred to as the “3Ps”: serving the people,
benefiting the planet and also making profit. All BRAC
enterprises are driven by social and/or environmental
causes with ultimate goal to alleviate poverty. However,
BRAC also strives to make its enterprises as financially
viable as possible without deviating from the respective
social missions and without depriving the low-income
entrepreneurs that the BRAC enterprises aim to serve.

Does BRAC make money off the
poor?
No. BRAC enterprises ensure that the local suppliers
(mostly poor villagers) receive skills, training and
resources, produce their products efficiently and sell
them in larger markets where demand and consumers’
willingness to pay are the greatest. As a result, these
fragmented suppliers become small entrepreneurs
and advance on their path to financial solvency
through BRAC’s enterprises. Through its retail outlets
and distribution channels, BRAC re-sells some of
the commercially viable products however, always
ensuring that the suppliers receive fair price and that the
underlying social cause has been served.

What is BRAC Enterprises’
bottom line?
Although all of the BRAC enterprises are committed
toward achieving financial, social and environmental
returns, BRAC takes a unique approach in defining its
triple bottom line by focusing on three ethoses: people,
profit and the planet (the “3Ps”). A BRAC enterprise
must meet three criteria in order to be considered a
successful and sustainable business:
● It must serve the needs of poor people
● It must be environmentally friendly, and
● It must make profit to help keep BRAC’s
development works sustainable

How can BRAC enterprises be
for-profit yet remain true to the
social/environmental missions?
Through its collaborative network of enterprises,
development programmes and investments, BRAC has
pioneered a unique model that advocates for business
sustainability as “doing well by doing good”. BRAC
Enterprises strive to strike the right balance between
financial profits and social returns in order to achieve
the targeted double/triple bottom lines. By operating
as a for-profit organisation that aims to alleviate poverty
through its business operations and supply chain, BRAC
succeeds in implementing its vision to serve the society
in a profitable manner.

What factors influence the
development plan and strategy
of a BRAC Enterprise?
BRAC takes a holistic approach in conceptualising and
developing each of its enterprises. As BRAC enterprises
have expanded from development programme support
mechanisms to profitable enterprises with financial
and social missions, each enterprise has ensured that
it complies with the four fundamental objectives of a
BRAC enterprise:

a. Creating job opportunities

b. Generating surplus for BRAC in order to minimise
donor dependency
c. Ensuring long-term support and contribution
toward the sustainability of BRAC’s development
interventions such as microfinance, education and
skills development etc.
d. Becoming viable investments in the long run in
order to act as ‘hedge’ against future liquidity
crises and donor dependency

Why is it important to reduce
donor dependency?
Donor funds can be subject to limitations including
finite availability and even scarcity during global financial
crises and liquidity crunches. Moreover, reliance on
donor funds can sometimes restrict an organisation’s
ability to utilise the funds according to its original
missions and visions. BRAC captures the financial gains
from its profitable enterprises and reinvests the money,
and as a result currently finances 73% of its annual
expenditure across its enterprises and development
programmes, with only 27% coming from donor funds.
Why does BRAC continue
to exist and expand its
enterprises?
Although most of the BRAC enterprises were
initially developed to support BRAC’s development
programmes, majority of them currently operate as
surplus generating ventures while maintaining their
ongoing commitment toward alleviation of poverty
via empowerment of the poor. BRAC enterprises no
longer just serve the immediate purpose of creating
market access – they maximise and monetise market
opportunities, making significant contribution to local
economy through development of market linkages,
entrepreneurs and employment opportunities. The
current surplus generating model of BRAC’s enterprises
concurrently achieves scalability, greater outreach and
maximum impact. By targeting profitable and scalable
businesses, BRAC enterprises are able to fulfill their
social missions at a much greater scale while increasing
financial surplus that reduce the organisation’s donor
dependency and support BRAC’s developmental
programmes and other innovations at a greater level.
Upon ensuring fair price to local suppliers and fostering
entrepreneurship and employment at the grass root
level, BRAC enterprises focus on successful marketing
and distribution in the urban and rural markets and
generate the maximum surplus that consumer demand
would allow. In most cases, BRAC enterprises end
up creating new opportunities in an un-served/under-
served market, which creates space for new entrants
to the market and fosters healthy competition. That is
why BRAC enterprises continue to exist, expand and
innovate through across multiple sectors.

What makes BRAC different?

The unique “BRAC Model”, that comprises of an
integrated network of Enterprises, Development
Programmes and Investments together provide a
distinctive synergy and essentially creates a 2+2=5
Effect. BRAC development programmes typically serve
as inspirations and opportunities to identify ‘gaps’
where BRAC enterprises can come in and increase the
productivity of people, assets, generate surplus for the
organisation, create job opportunities and provide a
better quality of life for poor people and the communities
they are from. The surpluses generated by the social
enterprises help BRAC become self-sustaining, allows
financing of innovative enterprises and help grow
the existing enterprises so that larger numbers of
poor people can become financially self-reliant. The
dividends from BRAC Investments contribute toward
financial sustenance of both BRAC Enterprises and
Development Programmes, create inclusivity and
provide hedge against future liquidity crisis. Moreover,
the integrated network and surplus generating ability
allow BRAC enterprises to truly take care of its members
in tough situations when an unfeasible operation needs
to be shut down and job loss becomes unavoidable. In
such cases BRAC has been able to provide alternative
support, such as in case of BRAC Dairy, BRAC was
able to avoid shutting down of 16 milk-chilling stations
in an ultra poor area and corresponding job losses by
investing in capacity enhancement of these chilling
stations up to 15%. In case of the closing of a sanitary
napkin production center in an ultra poor area, BRAC
successfully transferred its contracted employees to the
Targeted Ultra Poor (TUP) programme instead of laying
people off or settling with a short-term severance. Under
TUP, each of these workers receive Taka 10,000 worth
of tangible assets such as cattle or poultry, received
resource, training and education for taking care of these
animals and consequentially, got the opportunity to
remain on track for financial solvency and increase their
capital and skills in the process, instead of getting lost in
abject poverty and unemployment.
This synergetic approach as a whole maximises BRAC’s
impact and contribution toward poverty alleviation,
and provides BRAC Enterprises with five distinctive
advantages:
a. Synergy
b. Cross Collaboration
c. Cross Subsidy
d. Continuous Innovation
e. Holistic Support
How does BRAC ensure that the
surplus is really reinvested on an
“as needed” basis?
The surplus of BRAC’s enterprises is in fact distributed
as per the need and viability of the respective
enterprises and development programmes. Affiliated,
capital-intensive entities such as BRAC University are
established as separate and autonomous institutions
and do not fall within the periphery of BRAC, the
NGO, which governs the enterprises, investment and
development programmes. The surplus from BRAC
Enterprises is 50% reinvested within the enterprises, and
the remaining 50% goes to support BRAC’s “core fund”
to support overall expenditures including the non-profit
development programmes. The financial dividends from
BRAC investments help support BRAC’s self-financing
capabilities, reduce donor dependency and create a
‘safety net’ or hedge against future liquidity crisis.

What is BRAC’s selection

process for the entrepreneurs
for a given enterprise?
BRAC’s selection process across its enterprises and
programmes are based on skills and financial need.
For example, for the retail outlet Aarong, BRAC
employs artisans, craftsmen or seamstresses from
local BRAC regions and provides them with extensive
training in order to meet consistency and quality of
Aarong products, while ensuring fair wage, healthy
work environment and reasonable working hours. For
a development programme such as the Targeted Ultra
Poor (TUP) Programme, the extreme poor, i.e. usually
about the bottom 10%-15% of the low-income populace
in a region, who do not have the ability or aptitude to
launch an entrepreneurial venture with a micro loan, are
deemed eligible and received asset transfer from BRAC,
such as cows, chicken etc. These TUP members also
receive extensive training and resources to develop their
skills (such as training in artificial insemination), sanitary
environment (such as education on hygiene, cleanliness
and arsenic free water), health (such as receiving
vaccination, free eye check-ups and prenatal check-ups
from trained health workers,) and safe housing (such as
receiving tin sheets to build roofed houses for people
and cattle), and enabled these deprived population to
continue up BRAC’s “Economic Graduation” ladder.

How does BRAC monitor its

enterprise operations and
ensure consistency in quality?
By utilising local expertise, providing extensive training
to BRAC’s members and participants in BRAC’s
enterprises/programmes, and following a holistic
approach toward poverty alleviation that not only aims
at increasing the members’ income but also facilitates
awareness of health, environment, social justice, gender
equality etc.

How does BRAC Enterprises
take care of its people?
In addition to ensuring fair market wage, healthy work
environment, reasonable working hours and increasing
awareness, BRAC . For example, in 2009, BRAC Dairy
was faced with the need to in order to remain a viable
enterprise and had considered mechanising some of
its production lines. But that would have ended up in
considerable number of job losses and close down of
unprofitable milk-chilling stations in ultra poor areas. So
instead, BRAC invested in 16 of these chilling stations
and increased their capacity by 5%-15%. On another
instance, due to market infeasibility when BRAC was
compelled to shut down its Sanitary Napkin and Delivery
Kit operations in an area with ultra poor members
with very little or no entrepreneurial skills, instead of
terminating these people and leaving them in abject
poverty, or providing them with cash severance that they
had no knowledge of how to invest or protect, BRAC
enrolled these people under BRAC’s Targeted Ultra Poor
(TUP) programme. Under TUP, each of these people
were given Taka 10,000 worth of assets such as cows
and chicken, were provided education, training and
resources to take care of their animals and were even
provided training under BRAC’s artificial insemination .
As a result, each of these BRAC members was given the
opportunity to remain on track for financial solvency and
increase their capital and skills in the process, instead of
getting lost in abject poverty and unemployment.

What are the primary challenges
of the “BRAC Model”?
As BRAC and its enterprises continue to grow and
expand their outreach of social and financial benefits,
the challenge remains to continue to maintain social
impact while generating surplus without drifting away
from BRAC’s mission and vision, i.e. to alleviate poverty
and benefit the people, the planet and create surplus in
the process that can help BRAC become self-sustaining
and continue to grow. Since BRAC is not a commercial
or profit-driven institution, the returns from BRAC’s
investments and enterprises aim to beget social as well
as financial returns. In nominal terms, these returns are
not at par with strictly commercial, profit-driven players
in the market.

What are the “next steps” for
BRAC enterprises?
The next step for BRAC enterprises is to continue
capturing new opportunities in existing and new
sectors that will further the mission and vision of BRAC.
Through continuous identification of new opportunities
and innovation of new products BRAC will continue to
create interventions that address social needs, fosters
social equality and justice and alleviates poverty. In that
light, the immediate next focus of BRAC enterprises
is toward environmentally sustainable sectors such
as carbon emissions, nursery, clean energy and clean
water. Concurrently, BRAC Investments is also focusing
its efforts toward creating financially sustainability
through impact investing, equity sponsorship of small to
medium sized companies, financing of innovative social
entrepreneurial ventures etc. which further enhances
the potential of new enterprise creation and sustainable
development.