Yunus Social Business

Catalytic capital case study

Finanças Produtivas

Yunus Social Business

Yunus Social Business Brazil (YSB) provides catalytic capital to sustain and accelerate the growth of social businesses. YSB’s main goal is to finance and boost social businesses’ impact and sustainability, offering flexible concessional loans with affordable interest rates and long-term maturity, along with non-financial support such as mentorship and networking.

The due diligence process incorporates global guidelines and takes into account various factors such as sector, business, and company risks, as well as the financial model projected over five years, and involves a Theory of Change (ToC) with defined outcomes and outputs. YSB targets Small Businesses (SBs) with, at least, US$ 202K1 sales per annum, validated business models, recurring sales, and no cash burn) but are ready for growth. The loan helps SBs to grow and sustain themselves over time. It also serves as a pedagogical tool to strengthen the capacity of SBs and their administrative and financial information, enabling them to access formal credit, new investors, and new clients with more sophisticated contractual structures.

Assobio, a social business focused on reforestation and forest monitoring services in Brazil, received a loan from YSB in 2016 consisting of a single tranche of 260.000 BRL, equivalent to less than 65.000 USD. During the term of the loan, Assobio grew 5X and maintained a 0 % default rate. YSB also provided non-financial support through its NFS network, including mentorship, legal support, branding, and connections to new clients, which resulted in Assobio securing a US$ 202K reforestation contract in the Brazilian savannah with high commercial value. In terms of impact, Assobio has planted more than 920.000 trees, contributing to the preservation and restoration of the environment. Assobio’s success with YSB positioned them for further expansion, and they worked with a consulting firm to identify additional investors.

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1. 1BRL= 0.20241 USD Reference exchange rate on April 17, 2023.