Social enterprise: Profits that lift people out of poverty

“Yugashakthi pays me on time, and the rate [for the milk] is better than others,”   
Nihulesh, a buffalo farmer.  

Tearfund has been supporting Yugashakthi’s mission of transforming the livelihoods of community farmers and their families, for over a decade. Yugashakthi Guarantee Limited (YGL) is a social enterprise established in 2014 post-civil war Sri Lanka, founded and led by CEO Selina Kumar. The primary dairy project is in one of the regions most devastated by the conflict - rural Mullaitivu, in the Northern Province. 

The project started with eight small holder dairy farmers making an average of just $20 a month. Now, more than 6,100 farmers have benefited from agriculture and livelihood initiatives supported by Tearfund and Yugashakthi. Among them, milk-producing farmers are now earning an average of $150 per month from milk sales. 

Selina with Yugashakthi’s drinking yoghurt (left). Collected milk is put through the factory’s curd-making process (right)  

Social Enterprise (SE) is a unique type of organisation, Selina explains, "Not an NGO [non-government organisation], not a business, but a hybrid social enterprise combining the strengths of both models.”   

YGL shows how some businesses can be performed for the benefit of people contributing, not to maximise profit for the company and its shareholders. The profits here are reinvested in the welfare of the local communities, and in sustaining the organisation.      

YGL’s products are gaining popularity in Sri Lanka, with growing consumer demand and positive reviews. The potential for dealership expansion in Jaffna and other northern regions presents a strong growth opportunity.  Selina attributes the growth and resilience of YGL to God’s guidance and grace, noting that she prays regularly for discernment as she navigates numerous strategic decisions each day. She firmly believes that God is working through YGL, and that the organisation’s mission to provide fair prices to producers, act with love and compassion, and ensure high product quality is rooted in Christian values and ethics.   

The Social Enterprise Model   

Faith is a central and guiding principle within YGL’s organisational ethos. Christian staff members consistently shared how prayer informs their daily responsibilities and decision-making processes as they facilitate the ‘two arms’ of YGL—business and social (see diagram).    

YGL currently procures approximately 2,800 litres of milk daily, although this volume varies seasonally. According to Selina, its factory has the capacity to process up to 1,500 litres per day and their milk chilling capacity of 10,000 litres.    

YGL’s current products include:   

- Yoghurt

- Curd 

- Drinking yoghurt (in three different flavours)

- Paneer (South Asian cottage cheese)

- Ghee (a type of clarified butter which is primarily used for cooking curries, making sweets, and flavouring rice and also has cultural significance in Sri Lanka).    

Sample of YGL Products (left to right): Curd, curd in the clay pot, and drinking yoghurt.

Supporting smallholder farmers   

YGL pays the farmers, who graze their precious few cattle by the roadside or in the jungle more than the prevailing ‘farmgate’ price. Additional incentives are provided based on the quantity and quality of milk supplied. YGL maintains a fortnightly payment cycle, which these farmers appreciate for its reliability and fairness. With the fair price of their milk and stable income, the farmers said that their lives have improved in the last five years, thanks to the help of YGL. Further, YGL complements its business model with comprehensive community development initiatives.    

Profits are reinvested into:   

- Farmer payments   

- Factory operations (repairs, machinery, other major assets, etc.)   

- Staff salaries   

- Social development initiatives   

Building Resilience Beyond the Farm 

YGL has introduced a wide range of safety nets and socio-economic assistance to the farmers and their families to help improve their living standard and wellbeing. 

YGL places a large emphasis on supporting the next generation of farmers by offering scholarships and internships to university students, alongside providing farming training to over 6,000 farmers in animal care and milk production. When families are in need, YGL provides financial aid through bereavement support, medical assistance, low interest loans, and advance-payment to farmers for their milk supplies when emergencies arise.  

As a social enterprise, community is at that heart. YGL strengthens community through women’s support groups, counselling and legal services. Additionally, YGL offers practical and financial support to encourage farmers to start saving and invest in their future.

Jeevan (from Tearfund NZ) visits Yugashakthi in rural Mullaitivu, in the Northern Province of Sri Lanka. 

Enterprise   

In a short period, YGL has built significant infrastructure, including a milk processing factory and office spaces.   

Milk procurement and payments to farmers have grown steadily (see the milk procurement and payment diagrams). YGL employs more than 30 staff members and provides opportunities for dozens of other local people to work on a casual basis.   

Since July 2021 to as of June 2025, YGL has procured over 2.76 million litres of milk, injecting more than LKR 402 million (approx. NZD 2.21 million) into rural communities.  A total of 1,332 farmers are regularly supplying milk to YGL, directly benefiting from the dairy, and more than 6,000 farmers have benefited from various livestock and agriculture-related activities implemented by the organisation. Most of these beneficiaries come from the Tamil minority social group, who are marginalised and disadvantaged.    

The Road Ahead   

YGL envisions transforming the economic situation of smallholder farming households and protecting vulnerable groups, particularly women and children, by ensuring they have safe, secure, and responsible family and social environments. To achieve this, YGL aims to expand its dairy enterprises and scale up its social programme, Beyond Boundaries and Barriers (B3) and training. YGL aims to double its milk procurement by next year and increase this volume fourfold in the future, a move that will not only expand economic opportunities for poor and marginalised farmers but also generate additional employment for factory technicians and social workers.  

As a purpose-driven dairy social enterprise, YGL continues to demonstrate strong potential for transformative impact in this post-conflict region, navigating both economic adversity and complex social dynamics with resilience and vision.    

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