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Danone’s taste for microfinance pays dividends

070405_danonemicrofinance.gifFranck Riboud is a romantic at heart. The chairman of French food multinational Danone is also an astute businessman with a particular nose for marketing. Yet he seems to be managing to combine his passionate commitment for social responsibility with the more humdrum prerogatives of business and maximising profits. His latest plan is to launch next month with the help of French banking group Crédit Agricole a novel mutual fund to invest in microfinancing projects in the world’s poorest countries. It will be called the Danone Communities Fund and the idea is to raise initially some €100m to fund microfinancing investments in countries such as Bangladesh, where Danone is already heavily involved in a pioneering social business model.The French group will invest about €20m in the new fund, which is attracting interest from investors ranging from big funds and socially committed individuals to trade unions. They need not worry too much over the safety of their investment. Like other French mutual funds it will yield about 4 per cent a year and will invest only part of its funds in new microfinance projects. Danone will also encourage shareholders to reinvest dividends into the new fund. Mr Riboud says the new fund is all part of his vision of “positive globalisation”: a concept he acknowledges is not always easy to sell in France where most people continue to be uncomfortable if not downright hostile to globalisation. But he is also convinced that new business models can be developed addressing both the interests of a multinational company and the growing pressure and need for these companies to behave in a socially responsible and ethical fashion. Image source:

News selected by Covalence | Country: Bangladesh | Company: Danone | Source: Financial Times

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