Building Social Business Models: Lessons from the Grameen Experience

Grameen bank, founded in 1976, has both pioneered the development of micro-finance, and created nearly 30 businesses designed to alleviate poverty. The article traces the gradual development of Grameen's expertise in formulating social business models, which require new value propositions, value constellations and profit equations, and as such, resembles business model innovation. The article presents five lessons learned from this experience: three are similar to those of conventional business model innovation - challenging conventional thinking, finding complementary partners and undertaking continuous experimentation; two are specific to social business models: recruiting social-profit-oriented shareholders, and specifying social profit objectives clearly and early. We suggest these new business models where stakeholders replace shareholders as the focus of value maximization could empower capitalism to address overwhelming global concerns. (C) 2010 Elsevier Ltd. All rights reserved.