‘Much work needed to develop regional social enterprise ecosystem’

May 21, 2014 12:28 pm

By Sidra Tariq


More support and legislative reforms are needed for social entrepreneurship to flourish in the Mena region, according to Hisham ElRouby, founder and CEO of Etijah, a youth and development consultancy institute in Egypt.

“We need the ecosystem and the legal framework for people to easily register a social enterprise, because it is not common in our region – you can either become a company or a not-for-profit [organisation]. There is no form to be a social enterprise,” he says from the sidelines of the 11th CSR Summit, which ends today at The Address Dubai Marina.

ElRouby was part of a panel, entitled: Youth engagement in development: How social entrepreneurs are making a difference, which took place at the summit earlier this week.

In most countries in the region, “if you set up as a company, you will be under the law of taxes as a for-profit organisation [even though] you are doing social work. At the same time, you cannot be a not-for-profit [company] because you need to do some activities to earn some money. So, we need to have a hybrid model for social enterprises,” he explains.

A 2010 report, entitled: Social Entrepreneurship in the Middle East: Toward sustainable development for the next generation, outlines challenges facing social enterprises, which can be “broadly clustered in three categories: policymaking and governance-related challenges, the need for greater institutional, operational and financial support, and the lack of social and cultural awareness and recognition of their work.”  The study was released as a collaboration between the Middle East Youth Initiative, Wolfensohn Centre for Development at Brookings, Dubai School of Government and Silatech.

ElRouby also underlines the importance of raising awareness about social enterprises: “People on the street know what business entrepreneurs are, but not social entrepreneurs, as it’s not a common thing in our region.” Moreover, there aren’t enough organisations that support social enterprises here, he says. Institutions such as Asoka and Synergos do cater to the market, but the region needs more.

Funding is another challenge facing social entrepreneurs, he says. Aside from the traditional forms of financing for social enterprises, he sees crowd funding as a great tool to raise funds.

The 2010 report also recommends supporting incubators and seed funds that target youth-led social enterprise start-ups, in addition to setting up a regional social investment forum that can help scale youth initiatives.

According to ElRouby, all sectors of the economy – such as the government, private enterprises and non-profit organisations – can help create a conducive environment for social entrepreneurship to thrive: “The government needs to work on new policies and laws and the private NGOs need to work together to support social enterprises.”