The Story of BRAC - the biggest collaborative Social Business in Bangladesh
BRAC is the largest collaboration network of social businesses in the world. It is reaching 110 million poor people annually through its health, education, and economic development programs. Today, the organization generates 80 percent of its $485 million budget from its wholly owned social businesses.
BRAC’s integrated health, finance, and education programs are active in 70,000 villages in all of the 64 districts of Bangladesh, reaching an estimated 75 percent of the entire population. Its health programs serve more than 92 million people, its microfinance programs assist more than 7 million borrowers, and its education programs reach more than 1.5 million children.
BRAC is an organisation that Fazle Abed originally funded from selling his London flat as he tranferred from working as an exceutive for Shell to founding BRAC soon after Bangladesh’s war-torn independence in 1973. Around 1980, funding was nearly 100% donors, and BRAC was pioneering the best (arguably at that time the only sustainable) social business privitization model. By the mid 1990s, BRAC had already reduced external funding to about 50%.
BRAC’s third of a century journey has progressed through nationwide market leadership of service economy domains such as these:
Healthcare Nurses,
Schools,
Crafts Markets,
Milk and Cattle Industry,
Poultry Industry,
Silk Indutsry,
Microcredit.
Wherever BRAC achieves market leadership its channels are what British author Alan Mitchell terms right-side up. In other words the channel is designed to be the lowest cost to serving, distributing, communicating and innovating with communities in most critical need of life-saving, empowerment or sustainability solutions. This is the opposite market system round from brand channels with ever increasing cost that have often propagated the subliminal imperialism of profit-extracting global corporations.
Goodwill Media Beginnings
Back in 1974, BRAC’s first social business began in media. It emerged from a printing press that supplied books and other printed materials to the organization’s schools and education programs. Owning a press was a way to cut printing costs and to reclaim the profits that the profit-extracting sector would have taken. It also enables BRAC to open up the future relevance of schools curricula and cultural evolution. From the outset, this business also provided jobs and valuable job training for BRAC’s members, serving the organization’s mission to alleviate poverty. In its first year of operation, the press made $17,400 in profits. In 2007, it was generating $340,000 in profits
How else did this third of a century transformation and serial social business journey happen? Here is an outline:
Village Nursing & Education
BRAC used the profits from its printing press business to pilot a novel oral rehydration program. The program was effectively a nonprofit public health program to teach parents how to make an electrolyte-rich fluid for children with diarrhea. The fluid prevents dehydration, which proves deadly to many millions of children in the developing world every year. BRAC initially trained 4,000 oral rehydration workers (ORWs) and then sent them out to educate some 30,000 families. Accurate and effective teaching was extremely important because if parents gave their children too much of the solution, the children could get even sicker. So BRAC rewarded the ORWs with a performance-based incentive system: The more each parent remembered, the higher the ORW’s salary. Over the course of 10 years, BRAC’s oral rehydration program reached 14 million of Bangladesh’s 19 million households. The program played a major role in halving the country’s infant mortality rates which had been as high as 20% among under 5’s, with government surveys showing that 70 percent of families in Bangladesh use BRAC’s oral rehydration solution to treat diarrhea
What BRAC planted at the grassroots became even more important to the rural sustainability of Bangladesh – and the lives of women and children - than its first life-saving product. Its start up involved embedding a female nurse and teacher in every village. Early on Fazle Abed has described how there is all the system and network design difference in the world when professionals are located in the villages. Their vocational rewards as most loved people in the community are more than money can pay for. Moreover, in BRAC vilages women started to be the bearers of the most valuable knowledge- a dynamic with extraordinary social impact.
Compare this social networking prospect with the opposite history of professionals who live in big cities and seeing the serviice of poor in vilages increasingly as a chore. One which over time their professional boesy demans more and more financial rewards to cater for, and where empowering flows of vital information through the village becomes an ever more distant impracticality.
Today’s nursing programs have elevated focus to such areas as
MNCH Maternal, Neonatal and Child Health
WASH Water and Sanitation Health
Door to door village nursing health service 70000 employees - 18 million households served
AARONG: Rural Handicrafts markets To Schools & Microcredit
While the oral rehydration campaign was in full force, BRAC launched the social business of Aarong Craft Shops. Aarong helps 65,000 rural artisans market and sell their handicrafts and has become the most popular handicraft marketing operation in Bangladesh. Its brand is as fashionable as any a for-profit corporation can offer.
Using revenues from Aarong, BRAC began testing microfinance and primary education initiatives. When the oral rehydration campaign concluded in the 1990s, BRAC was ready to scale up its most successful microfinance and education programs. In just over a decade, BRAC along with Grameen had innovated a way of developing the most basic trilple-win of ending poverty that any village community can get : hi-trust bankers, nusrses and teachers.
And as for Aarong its annual sales have reached BDT 1,980 million (USD 28.7 million).
Integrating Schools & BRACNet
BRAC’s Informal schooling system in 2007 has established : 20000 pre-primary, 32000 primary, 2000 secondary schools.
BRAC wanted to improve teacher training and curricula in its network of more than 50,000 one-room rural schools. The organization decided that high-speed Internet access was the best way to get information to teachers. Yet Bangladesh did not have nationwide high-speed coverage. So BRAC partnered with San Francisco- based gNet to create bracNet, which is building Bangladesh’s high-speed network from scratch. As with other BRAC-run social business, bracNet is expected to become a sustainable social business.
In actuality, BRAC has become the world’s best at privitization designed round social buisness modelling. Meanwhile, it has also cross-subsidised some of the above when grants were either not available or would have introduced non-microentrepreunial conditions by developing whole industry sectors within Bangladesh’s economy. Having no short-term owners it can afford to invest in sustainability’s longer but bigger investment in exponential development.
BRAC DAIRY: Integrated dairy Busnesses
In 1990, BRAC began making microloans to poor women who wanted to raise milk cattle. But when Abed met with one of the program’s borrowers, she revealed that she was having a hard time getting the milk to market, and that even when she could, she received only one-third of the price that milk sellers received in Dhaka, Bangladesh’s capital. So in 1998 BRAC established the BRAC Dairy, which primarily purchases and markets the milk that its microlendees produce. To collect and process the milk for the dairy, BRAC has set up 80 milk chilling centers across Bangladesh. The BRAC Dairy and milk collection centers employ more than 500 people. In 2007, the project generated $1.15 million in surplus cash, which was enough not only to support the workers and dairy farmers, but also to expand operations. The BRAC Dairy is also becoming increasingly competitive with other Bangladeshi dairies: Its market share increased from 20 percent in 2006 to 35 percent in 2007.
BRAC created an artificial insemination (AI) program in 1998. BRAC operates one bull station and a network of 70 storage facilities across the country, training more than 1,000 AI workers. These workers not only deliver high-quality semen and inseminate cows, but also provide wrap-around services such as vaccination, pregnancy diagnosis, and calf delivery. BRAC pays the workers a fixed fee per insemination, which means that the more work the AI worker completes, the greater is his income. BRAC’s AI program generated $60,000 in profits in 2007. At the same time, it not only granted job skills and income to people across Bangladesh, but also supported the microentrepreneurs, dairy and chilling-center employees, and consumers—many of whom are also poor—further down the value chain.
BRAC sometimes preserves those that make outsized contributions to poverty alleviation. For example, some of BRAC’s milk-chilling stations are not collecting enough milk to break even in the near term. Yet the organization keeps the stations open because they are located in extremely poor areas that would suffer greatly from the removal of access to fair prices.
Integrate Broiler Processing
In Bangladesh, approximately 70% of landless rural women are directly or indirectly involved in poultry rearing activities. The poultry and livestock sector accounts for approximately 3% of the country's GDP . BRAC's poultry and livestock programme is composed of several components: poultry and livestock extension programme, poultry farms and hatcheries, feed mills, bull station, feed analysis and poultry disease diagnosis laboratories .The programme was started in the early eighties to protect poultry and livestock from disease by developing skilled village-level poultry and livestock extension workers (para veterinarians).We produce and distribute good quality day old chicks as well as poultry, cattle and fish feed. To date, 2.1 million people have been involved in this programme. The government has taken up our livestock development model for widespread implementation.
Integrated Silk Production
BRAC’s Sericulture programme in 2007 has built up to more than 7,500 silkworm rearers and 5,800 spinners. They have been engaged in producing a total of 212 metric tonnes of silk worm cocoons and 21 metric tonnes of raw silk.
Solar Social Business
BRAC Solar Energy Program for Sustainable Development was launched in December 1997. An integrated and multipurpose program, its projects spread across the country in a wide variety of settings including households,
BRAC and other NGO offices, training centers, schools, health clinics, cyclone shelters, a weather monitoring station, a government rest house and income generating centers such as carpentry, tailoring shops, cloth dyeing and printing shops, leather workshops, restaurants and grocery shops. stand- alone PV systems and wind turbines for solar electricity, Hot Box cookers and biogas plants have been installed in various regions throughout the country. In addition, the program has also installed 2 PV- utility interactive systems and 6 PV-wind turbine hybrid systems pioneering in Bangladesh. Projects with solar thermal micro-hydroelectric generators, biogas electricity and are soon be implemented.
With support from WB/GEF/GTZ/Kfw BRAC installed capacity 1.38 Mw( September , 2007) Stand alone Solar Home System to provide electricity in rural off-grid areas and served 26,600 beneficiaries.
Integrated Microcredit
BRAC has computerized its entire microfinance program so that it could more closely monitor all of its loans and curtail ineffective practices. At the heart of its banking businesses is one of Bangaldesh’s 3 mainstream rural microcredit programs. However at extremes it offers BRAC’s new Program for the Ultra- Poor, which currently serves 132,000 women. The focus group revealed that some of the poorest families in Bangladesh could not participate in BRAC’s microfinance program because they did not have the wherewithal to borrow and repay.
“They needed grants rather than loans,” says Abed. And so BRAC designed a program that would “hold the hands” of Bangladesh’s poorest 10 percent by giving them grants and stipends for the first two years of their participation, he says. Then, most of the clients “graduate,” becoming full-fledged microfinance borrowers.
Converselye for-profit BRAC bank in cities which has been recently IPO’d and is a stock market sucess for BRAC in somewhat the same way that Graemee’s early linkage with mobile telephiony has boosted its independence of funding.
Back on the social business track, another innovative BRAC microcerdit program connect teenage girls now serving 300,000+. This also neighbours one of its training programs: Legal rights training for women. There is also BRAC University. And BRAC research webs http://www.bracresearch.org/
Then BRAC has the wherewithal as the world’s largest grassroots network employer to take on special projects such as Disaster relief & reconstruction after the 2007 cyclone as its latest annual reports show,
BRAC has also started to replicate internationally. One of its earlier and strongest replications is in Afghanistan.
MC 179,000 ,members
4854 schools
3633 village nursing
1390 poultry & livestock
Emerging replications with 2007 marking BRAC’s first full year of operations in
Africa, with BRAC now working in Southern Sudan in addition to Tanzania and Uganda. In this short
span of time, our programmes in Africa have experienced dramatic growth.
Tanzania
MC 65,000
400 nursing
380 agriculture
370 poultry and livestock
Uganda MC 48,000
200 nursing
122 learning centres in displaced peoples camps serving about 4000
S Sudan
MC 4000
Next Sri Lanka, Pakistan
References:
1. socialbusiness.tv/sitebuildercontent/sitebuilderfiles/bracas... (Link not longer valid)
2. http://www.lged-rein.org/database.php?pageid=66