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Social enterprises when done right can have a significant impact, not just socially or environmentally, but also economically.

In a report by Social Enterprise UK 2018, social enterprises make up 3% of UK GDP and 5% of all UK employment, as much as the entire creative industry sector. Social enterprises also contributed around 60 billion GBP into the UK economy.

It’s clear that their potential is huge, but social enterprises in Malaysia have a lot of hurdles they need to overcome before they can reach that critical point. 

Wanting to know more, we spoke to Dzuleira Abu Bakar, the CEO of MaGIC, to get her thoughts.

MaGIC has long been championing the growth and development of social enterprises; they also take care of the accreditation of social enterprises in Malaysia. 

1. Failure To Know Or Match The Criteria

Dzuleira observed that social entrepreneurship is still in its infancy here, and people often confuse a social enterprise with a charity. But that is fundamentally wrong. 

Generally, to be recognised as a social enterprise, companies have to hit three main criteria:

1. The ends: the social goal of the company must be measurable,
2. The means: the company must be selling a product or a service,
3. Have a sound financial approach.

But rather than quibble, MaGIC’s stand is: as long as the company is a legal entity with a social or environmental mission and has a profit-making business model, MaGIC will be there to support them.

2. Lacking In The How, After Knowing The Why

Social entrepreneurs usually are very clear on what they want to fight for, but don’t know how to proceed.

“Even if their objective is to do good, they must operate a for-profit business and have clear and specific social or environmental goals,” said Dzuleira.

This means thinking like entrepreneurs from the get-go, and knowing how to generate income first and foremost.

Without a viable business model, it won’t be sustainable in the long run. 

FailureInstitute reported that a whopping 38.3% of social enterprises in Mexico fail within a year, so these problems aren’t unique to Malaysia alone.

MaGIC, as part of the Ministry of Entrepreneur Development (MED), worked to develop the Social Enterprise Accreditation (SE.A).

Getting accredited offers a wide variety of benefits such as tax incentives and a listing on a public directory. The SE.A also allows social enterprises to access more support and growth opportunities, and prove their credibility.

Projek57, one of the recently accredited social enterprises. They focus on empowering underprivileged youths through training / Image Credit: Projek57

3. Shortage Of Talents

In the same Mexican study, failure to either retain or hire talents is also one of the main reasons a social enterprise will fail.

Dzuleira said that with SE.A, local social enterprises have the opportunity to gain recognition and communicate their commitments on social and environmental impact.

It will help them attract talent and even gain business by standing out as an ethical choice in a crowded market.

4. Not Enough Learning From Each Other

An entrepreneur must learn from their failures. Knowing what they did right or wrong in the failed business will make it easier for them to know what to do in their next step of the journey.

In the entrepreneurship realm, failure is expected. At MaGIC, we always tell our entrepreneurs to ‘fail fast, and come up with the next ideas fast’. Failure can be a real motivator, but every business, no matter what their location or sector, needs a defined ‘next step strategy’.

Dzuleira Abu Bakar, CEO of MaGIC

Without learning about what other social enterprises have failed to do or had successfully done, innovating or creating a new product or service will not be an easy task.

In a study conducted in Canada, they noted that some social enterprises fail because too many are trying to do the same thing, saturating the market.

MaGIC’s answer to this is by running Social Entrepreneurship Knowledge Days and Social Entrepreneurship Bootcamps.

The Social Entrepreneurship Development team of MaGIC teams up with IMU to deliver SE Knowledge Day / Image Credit: MaGIC

On top of going through classes on the fundamentals of being a social enterprise to help develop or validate their social impact ideas, current social enterprises are also present to share their trials and tribulations, and what inspires them to do what they do.

This acts as a hub for all social entrepreneurs to gather, share ideas and learn from each other too.

5. Changing The Public Mindset

I previously assumed that social enterprise products or services are more expensive, but my colleague told me to check my preconceptions, citing TLC as an example. 

A quick Tesco search showed me that a 2L TLC Floor Cleaner was priced at RM11.60, which was a ringgit cheaper than another common brand listed there.

Dzuleira also pointed out that many Malaysians still thinks that social entrepreneurship is not a viable career and she wants to change that.

“There are misconceptions, such as being a social enterprise will mean not having personal sustainable income or it’s just a one-off social responsibility activity.”

The best way to challenge this is education and exposure, which is why Buy For Impact bazaar events and strategic partnerships with corporates helps to bring more eyeballs their way.

For example, MaGIC recently signed an MoU with Standard Chartered Bank to amplify the social business landscape through the SEtia programme (Social Entrepreneurs – Transformation, Innovation and Acceleration). 

MaGIC signs an MoU with Standard Chartered Bank for the SEtia programme / Image Credit: MaGIC Cyberjaya Facebook

Through this partnership, Standard Chartered Bank will contribute RM200,000 to cover the costs of approximately 50 social entrepreneurs in the capacity building programme.


Not all businesses can shift their models to become social enterprises. In the same way, not all social entrepreneurs can or even want to scale their businesses like the more mainstream startups would.

Dzuleira shared her insight into what she thinks makes a successful social entrepreneur she said first, it goes back to the underlying motivation to start a social enterprise.

“For some people, it is simply the freedom of being their own boss while for others, it is a deep-rooted emotional connection to a particular problem that will result in a lasting positive impact.”

MaGIC’s mandate to facilitate the growth of social enterprises continues on.

Because the ecosystem is still young, “this is the perfect opportunity for us to invest strategically to ensure the development of a sector that will transform the nation’s economy to one that is more equitable and sustainable”, shared Dzuleira.

“Moving forward, not only do we want to continue identifying and accrediting them, but also channel business and funds their way to make them more financially sustainable and resilient as they go out into the world and create a long-term positive impact on society and the environment.”

  • Find out more about what we’ve written on MaGIC here.
  • Read our latest articles on social enterprises here.

Featured Image Credit: MaGIC

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Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)