Helping the poor to help themselves

Fuping Development Institute is a nonprofit organization that helps low-income groups. Established to alleviate poverty and promote social equality, the institute runs four social enterprises with registered capital totaling 100 million yuan ($16 million).

Fuping's first project centered on microfinance. In 1993, the project started with a 500 yuan experiment in Linxian county, Shanxi province, later expanding to Shanxi's Yongji, Dayi county in Sichuan province and Beijing. Its microloan portfolio in Yongji eventually hit 100 million yuan, with an annual interest rate of 21 percent and a 99 percent repayment rate. Local farmers can obtain a maximum loan of 30,000 yuan without the need for collateral within two weeks of applying.

From its inception, Fuping has been devoted to helping women from poor families in China's central and western regions to find decent jobs and providing opportunities for personal development in the city. By the end of 2011, it had trained 21,400 housekeepers to work in Beijing. Nearly 90 percent of the women hail from remote mountain areas.

"In addition to a financial statement, every social enterprise should issue a statement on its social impact," said Shen Dongshu, Fuping's president. "When we first started providing housekeeper training and services, housekeepers in Beijing had no holidays. But now, it is a contractual obligation that they have one day off every week. We played a major role in making this change."

The institute is also devoted to providing high-quality early education products and low-cost services, so that young children from low-income families and migrant workers can receive a better education.

"All our efforts should be focused on making a big social impact continually. If we can achieve this goal, there is nothing wrong with receiving donations or paying dividends to shareholders," said Shen.

"Nowadays, many Chinese people have become interested in social enterprises because they think the funds donated should be used more efficiently and they believe that will happen if people handle the donations in an entrepreneurial way."

Unlike traditional NGOs, which only need to persuade a small number of people to donate, social enterprises put greater emphasis on selling their services. They have to constantly deal with a large number of people to receive money.

Social entrepreneurs compete with business professionals. They have to cover their expenses by using a variety of social resources and the fierce competition will force them to become more efficient, said Shen.