Man faces bankruptcy after losing $1m in social venture

Man faces bankruptcy after losing $1m in social venture

SINGAPORE - Helping the disadvantaged can be disadvantageous.

For one well-intentioned man, it cost him a whopping $1 million.

That's what Kampung@Simpang Bedok, meant to help aspiring hawkers run their own business, cost Mr Lionel Lye's team.

The 800-seater, 10,000 sq ft, 32-stall place opened in 2012.

A food and beverage (F&B) group called Best of Asia, made up of 12 friends from various professions, invested $500,000 to kick-start Singapore's first privately-run hawker centre.

Mr Lye, a renovator, was the managing director.

A second group of sponsors pumped in another $500,000.

Mr Lye, 54, said of their not-for-profit model: "We need to have a place in our society where the less well-off can make a living for their families, learn to stand on their feet and be proud of themselves."

Initially, he thought of hiring former convicts after contacts from halfway houses told him about their struggles to land a job. But juggling their probation timing was tough, so Mr Lye worked with disadvantaged families instead.

Under his watch, a handful of tenants paid monthly rent of more than $2,000, depending on their financial background, and kept the profits.

Those unable to pay rent were paid a salary to operate the stall until they were able to take over.

The venture folded last October, before its lease with Far East Organisation was up.

As the venture's personal guarantor, he may face bankruptcy.

HIGH PRICE

Another social entrepreneur, Dignity Kitchen founder Koh Seng Choon, also spent $1 million to run his hawker training school for the disabled and disadvantaged. It was, in his words, the "equivalent of buying a Ferrari".

The venture made a profit of almost $4,000 last year, more than three years after it started in 2010.

But the path can be rocky.

In 2009, about a third of the 73 social enterprises in funding schemes failed, The Straits Times reported.

There are about 400 social enterprises here, industry watchers like the Social Enterprise Association estimated. Covering a range of causes and business models, they are bound by the common aim to create social impact in what they do.

Mr Koh estimated he lost about $1,000 a day initially.

"People asked me whether I ever wanted to give up. Of course, I did. Every single day."

Another social entrepreneur, Mr Benny Se Teo, founder of Western food chain Eighteen chefs, said: "F&B people are crazy people. It's quite normal to lose $15,000 a month when you first start. Not everyone can take that."

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