Malaysia's social enterprises battle to stay afloat after stepping up during coronavirus shutdown

Delivery drivers from Aramex partnered with social enterprise Yellow House to deliver groceries to needy families in Selangor. PHOTO: YELLOW HOUSE KL

KUALA LUMPUR - Malaysia's social enterprises played a critical role in aiding the needy during the country's partial shutdown to curb the coronavirus, but are now themselves struggling to stay afloat as their revenue streams dry up.

Many stepped up to supply face masks, personal protective equipment, food and groceries for frontliners and communities in need from mid-March, when the country first implemented movement controls that shut non-essential businesses and schools, and kept people confined to their homes.

Masala Wheels - a social enterprise food truck and catering service that employs at-risk youth and underprivileged individuals - prepared over 16,000 food packages to be sent to homes and also frontliners.

Yellow House - a volunteering hostel which employs the homeless to conduct unique walking tours in Kuala Lumpur - raised over RM80,000 (S$26,000) from the public that was used to distribute groceries to hundreds of struggling families across Selangor state.

These organisations face the same challenges of mainstream enterprises - generating enough income to stay in business while the pandemic continues to ravage the economy.

Social enterprises typically apply business solutions to address social needs, and use their operations and profits to further causes such as environmental protection, education or refugee aid.

In Malaysia, there are fewer than 300 such accredited enterprises of which most have been operating for less than 10 years.

A survey conducted in March by the government agency responsible for social enterprises, Malaysian Global Innovation and Creativity Centre (MaGIC), found that only 2.9 per cent of start-ups and social enterprises in the country were confident of being able to survive beyond 12 months, if the movement controls continued.

Movement controls have been eased since early May, but the outlook remains daunting.

Yellow House for example has seen dwindling demand for its walking tours and fewer volunteers at its hostel as Malaysia's borders remain shut to foreigners.

"Now that we are in the recovery period, we... need to... return to more sustainable practices in the long term, as the food aid is only relevant in an emergency, lockdown situation," CEO Shyam Priah told The Straits Times.

The organisation is now refocusing its efforts to develop an urban farm which can provide employment opportunities for street people and refugees. If it cannot restart operations soon, over 250 beneficiaries stand to lose learning and livelihood opportunities.

Others have learnt valuable lessons from adversity.

Environmental education outfit Ecocentric Transitions went online during the shutdown and used up its savings to provide its four-week course for free.

"We did not have the skills for these - we learnt on the job. We wrote the scripts, we shot the videos...," Ecocentric founder and director Firdaus Nisha told ST.

The videos drew the attention of the government, and the enterprise is now going to work with the Energy and Natural Resources Ministry on a new project.

Babylon Vertical Farms - which promotes vegetable farming using minimal resources and redirects some of its income to help underprivileged and at-risk youth - also gained from going online, after initially losing the bulk of its business from its restaurant and hotel clients due to the shutdown.

"We made better margins because of the online sales," Babylon's head of sales and marketing, Mr Abang Dzulqarnaen, told ST.

Prime Minister Muhyddin Yassin recently announced RM10 million in matching grants for social enterprises as part of the government's pandemic relief measures. However, some are calling for a more comprehensive initiative by the government to spur the progress of social enterprises which have struggled to scale up their businesses.

"Right now, the help from the government is mostly in terms of funding and capacity building. There isn't much for social enterprises looking to scale," Mr Wan Dazriq Wan Zulkiflee, a founder at PurpoSE Malaysia - a venture building firm focusing on social enterprises - told ST.

Mr Wan Dazriq said that the government should focus on building value chains and creating policy interventions to aid social enterprises.

"We are talking about market access, policies," he said. He cites as an example the UK government, which has set up mechanisms to procure services and products directly from social enterprises.

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