In rural Laos, where a buffalo can be one of a family’s most valuable assets, Laos Buffalo Dairy (LBD) rents pregnant animals from local farmers and cares for them through maternity. They also generate revenues from the milk through dairy production.
This mutually beneficial model creates value for rural households while sustaining a commercial business. Yet LBD is forging a path in a policy environment that was not designed for enterprises combining commercial activity with an explicit social purpose.
And in this, Laos is far from alone. In many countries, social enterprises still have to navigate financing, taxation and regulatory frameworks built largely around either conventional companies or non-profit organisations.
A business model built around shared value
LBD decided not to wait for a legal framework to catch up with the need. In rural Laos, more than 70% of the rural population relies on smallholder farming and livestock for their survival.
Yet disease outbreaks, poor animal nutrition, and high calf mortality can quickly turn a family’s most valuable assets into devastating losses, with the loss of a single buffalo or pig potentially wiping out as much as 50% of a family’s annual household savings.
LBD saw an opportunity to build a different kind of business model that combines commercial activity with a practical social purpose, bringing pregnant buffaloes into a dedicated facility where they receive proper nutrition, clean maternity care, and veterinary support.
Calf mortality has subsequently dropped drastically to less than 3%. Creating social enterprise models like ours provides economic stability while transforming local agricultural practices from within.
Over 40 local staff members and farmers are continuously trained in veterinary care, animal husbandry, and dairy processing, allowing the knowledge to permanently stay within the community.
To fund these programmes sustainably, LBD not only combine farm tourism with artisanal dairy production, but are now also developing a new buffalo milk skincare line for export markets – building sustainability without dependency.
When the business model does not fit the legal framework
One of LBD’s biggest challenges was establishing a business with a social mission in a country with no legal “Social Enterprise” status. Unlike NGOs, social enterprises generate revenues based on market activities while pursuing social objectives. Yet, without legal recognition, they cannot benefit from preferential tax, financing and regulatory conditions to reflect their valuable investment in community services and social programmes.
A lack of understanding and recognition can also make it difficult to access appropriate finance. Financial institutions may assess a social enterprise solely on short-term financial returns, without considering how reinvesting parts of its profits into social objectives can contribute to long-term business sustainability.
At the same time, infrastructure and market-access constraints – such as unreliable cross-border cold-chain logistics for fresh dairy products – can limit opportunities to scale. Frontline social entrepreneurs cannot overcome these barriers alone.
Three ways policy can help social enterprises scale
Three areas of policy action could help bridge these gaps and unlock the full potential of social enterprises in Laos and across ASEAN:
First, governments could recognise social enterprises, such as through a dedicated status, registration or certification scheme. Within ASEAN, Viet Nam, Thailand and Indonesia already have legal definitions for social enterprises. Examples beyond the region also demonstrate how such recognition can unlock more targeted support. In France, the Entreprise Solidaire d’Utilité Sociale (ESUS) accreditation – held by almost 3 000 enterprises in 2024 – gives eligible social enterprises access to dedicated solidarity-based finance and public procurement opportunities.
Second, governments could facilitate access to appropriate finance, including patient loans, investment-readiness support, blended finance and public guarantees that reduce risks for commercial lenders. For instance, SME Bank’s Social Enterprise Financing Scheme (SEFS), introduced in line with the Malaysia Social Entrepreneurship Blueprint (SEMy2030), offers dedicated financing of up to RM500 000 for recognised social enterprises for working capital and investment in machinery and equipment.
Third, like for any other type of business, governments could strengthen market and business-readiness and support infrastructure, including one-stop government services, simplified export procedures, improved trade and logistics infrastructure, and practical training in areas such as agriculture, food safety and entrepreneurship. The ASEAN Social Enterprise Development Programme (ASEAN SEDP) offers a regional example, combining tailored capacity building and mentorship on market access, investor connections and seed funding for youth-led social enterprises across Southeast Asia. Since its launch in 2021, the programme – which is now in its fourth cycle – has supported 70 social enterprises and directly equipped more than 280 entrepreneurs with skills and knowledge.
Together, these measures could help Laos and other ASEAN countries build a stronger social enterprise ecosystem, enabling these businesses to create jobs, and compete in regional markets while addressing societal and environmental challenges.
Creating the conditions for inclusive growth
LBD demonstrates that social enterprises can create real impact even when the legal framework is still catching up. But these isolated success stories alone cannot transform the sector.
Across ASEAN, there is an opportunity to turn social enterprises into engines of inclusive growth, by giving them the recognition, finance and market access they need to scale. For Laos, this is not simply about creating a new legal business category – it is about creating the conditions to allow sustainable, market-driven growth to reach the rural communities that need it the most.
Originally from Martinique and based in Laos, I am a communication and project development specialist working at the intersection of social enterprise and sustainable tourism. As Communication Officer at Laos Buffalo Dairy, an award-winning social enterprise bridging sustainable agriculture and community support, I contribute to innovative initiatives that add value to local resources and promote responsible growth.
In parallel, I operate as a travel specialist (Laos Premium), designing bespoke mid-range to premium itineraries. I am also currently developing immersive, solidarity-based travel projects in remote and hard-to-reach regions like Phongsaly. My goal is to build ethical, long-term partnerships with local communities while offering travelers an authentic connection to the country.
Driven by a commitment to the social economy and heritage preservation, I aim to create economic models that combine operational excellence, authentic storytelling, and positive local impact.
Moe Shiojiri works as a policy analyst in the Social Economy and Innovation unit at the OECD Centre for Entrepreneurship, SMEs, Regions and Cities. She focuses on areas including social entrepreneurship, inclusive business and social innovation, exploring how these approaches can help address societal challenges such as unequal access to economic opportunities and essential services. Moe is from Japan and holds a degree in political science from Sophia University in Tokyo, Japan, and a master’s degree in international and development studies from the Geneva Graduate Institute in Geneva, Switzerland.