For profit or not for profit?

The profit or not for profit debate has been going on for so long, Jacqueline Novogratz of CEO of the Acumen Fundcommented on the matter in a blog entry entitled “A place for profits in microfinance?

I think there are situations were a non profit stance makes a lot of sense, thus making a strong case for organisations such as Trickle Up but if we are going to achieve universal access of financial services or internet access for the base of the pyramid, these initiatives need to be private sector driven. The public sector and NGOs rarely have the capital and or the human resources to roll out products or services widely. A lot still needs to be done though. Many entrepreneurs in the developing world lack capacity to attract capital into their businesses, and this is not to say the capital markets are illiquid but they are poor at packaging their value proposition.

I think thats an area the non profits should concentrate on. Its certainly my greatest challenge, that and high transaction costs and a general lack of innovation by bankers and critical government departments. The Infodev report Scaling Up Innovation and Entrepreneurship in Developing Countries: The Role of Private Sector Finance summed it up well for ICT ventures such as the one I propose.

The question of cybercafes and telecentres has also been subject to the profit or not for profit debate, I will be blogging it out soon.

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