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10 thg 12, 20233 phút đọc

Social Enterprise Startup: New wave, old challenges

Đã cập nhật: 18 thg 12, 2023

Nearly 9 years since the Enterprise Law 2014 took effect, however, Vietnam only had about 140 registered social enterprises in 2020, a small number compared to the actual number of operational enterprises. Especially when the social enterprise sector employs 74% of workers from disadvantaged groups.

The Role of Social Enterprises

Social Enterprises prioritize social objectives, alongside financial goals, aiming to address various social issues while sustaining their operations. SEs usually reinvest a significant portion of their profits back into communities and social objectives. This model operates by generating profits and strategically reinvesting these earnings to expand and enhance business operations.

SEs like KymViet, Vụn Art, and Dao’s Care allocate a substantial part of their profits to support and train disabled workers, maximizing their potential for employment. Subsequently, the profits generated from business activities are used for training and career guidance for other disabled individuals.

Currently, KymViet employs approximately 30 workers, mostly individuals who are deaf. KymViet's mission is to be a social enterprise for people with disabilities and by people with disabilities.

Activities at Kymviet (Source: Kymviet)

Another notable social enterprise, Dao’s Care, recruits and trains visually impaired individuals to become skilled therapists. Throughout their training, they enhance social skills, helping them to be more independent and confident when integrated into society. Dao's Care provide quality massages and herbal baths, while continuously supporting the Red Dao ethnic minority in Sapa.

Dao's Care (Source: Dao's Care)

Meanwhile, Vụn Art aims to preserve and promote traditional culture, creating employment opportunities for people with disabilities, and utilizing materials such as fabric or silk to protect the environment.

Working time at Vụn Art (Soucre: Vụn Art)

These Social Enterprises share the same value in creating employment for vulnerable groups, especially people with disabilities, motivating them, and creating a sense of belonging as well as social connectivity.

Social Enterprise – “Social” or “Profit”?

Social Enterprise is a new concept in Vietnam, therefore, there is no specific definition of social enterprise in Vietnam. The lack of a shared regulation on SEs leads to difficulties in assessing and comparing enterprises based on social criteria.

Some opinions suggest that businesses aiming to contribute to society can be considered social enterprises. However, the Founder of KymViet - Pham Viet Hoai said: “If we just understand SEs like that, any enterprise providing goods, services, or employment to people could also be considered beneficial to society. Therefore, SEs cannot be defined that way”. Although SEs operations are similar to traditional businesses, it cannot be asserted that businesses and SEs are the same, as these two models distinctly differ in essence and purpose.

On the contrary, there's a segment that remains skeptical about the true goal of SEs and contends that they do not differ from traditional businesses. This viewpoint opposes the notion of providing special policies or preferential treatment to social enterprises, arguing that they should not be prioritized in policy frameworks. As a result, there is a lack of empathy or willingness to engage with and support social enterprises. Therefore, we need to differentiate clearly whether an enterprise is society-oriented or profit-oriented.

Lack of Policies for Social Enterprises

Currently, there is no specific policy framework for SEs leading to numerous challenges such as most of SEs being small-scale, lack of official recognition from the government, lack of legal status, struggle with limited human resources, and access to capital...

While the procedures to establish an enterprise is simple, the real challenge lies in ensuring the resilience and sustained growth of these SEs. When asked about the most needed policies for SEs, both Founders of Vụn Art and KymViet agree that support in rented premises would make it easier for them to expand their operations not only in Hanoi but also in other provinces.

SEs are not allowed to register headquarter (including branch offices, representative offices, and business locations) in apartment, buildings or community house. Therefore, finding premises becomes challenging due to the soaring land prices and limited space availability.

Moreover, despite the need for capital to expand premises, purchase equipment, and upscale the production ecosystem, it is hard to demand for loans since the banks have no supporting policy and often require collateral.

According to Ministry of Planning and Investment, SEs sector employs 74% of workers from disadvantaged groups. Among these, 28% of SEs employ over 51% of workers from groups of people with disabilities and ethnic minorities. At the end of April 2020, the number of registered social enterprises was only about 140 SEs, accounted for 4% of the total number enterprises in Vietnam. Meanwhile, Vietnam has about 7 million people with disabilities, accounting for more than 7.06% of the population.