Muhammad Yunus’ vision for social business has always been to create sustainable business models that pay no dividend to shareholders but rather, place all profits back into the company to further generate social value.  Having built the Grameen Group as an empire of social businesses and joint ventures, Yunus is hoping a Rs 50-crore social venture seed funding with the Indian Institute of Management, Ahmedabad (IIM-A) will allow India’s entrepreneurs to adopt the model.

According to the Economic Times, Yunus was in talks with IIM-A’s Centre for Innovation Incubation and Entrepreneurship (CIIE) a year earlier.

“We are exploring a collaboration with Yunus to build a stronger ecosystem to support fledgling entrepreneurs who are creating innovative solutions in the social sector,” said Rakesh Basant, chairperson of CIIE and professor of economics at IIM-A.

Yunus and the CIIE will collaborate to create a mentoring network and an incubation program designed by Grameen Creative Labs in Mumbai to help entrepreneurs identify and build social business.  The goal is to raise Rs 50-crore to support the idea but fundraising has not begun and there is uncertainty as to how much will be raised.

The collaboration comes as a response to the lack of social enterprises in India that do not return profits to shareholders.  Vineet Rai, founder and CEO of investment firm Aavishkaar, says skepticism for the model still exists as wealthy industrialists prefer charity over investment in business without any return expectations.  Yet India is starting to discover the risk-reward paradigm with some businesses already adopting the social business model.