When Social Enterprises Do Finance: Agents of Change in Lending Relationships, a Belgian Typology

Abstract

The 2007-2009 financial crisis and its destructive consequences for the real economy have placed social finance in the spotlight. Social finance involves a wide spectrum of initiatives ranging from large institutions such as social or alternative banks to small informal initiatives such as savings groups, and includes microfinance as well as collaborative finance (crowdfunding). Social finance is a crucial source of funds for social enterprises. But social finance initiatives can also be social enterprises. The paper explains how social enterprises get involved in social finance and draws a typology of the main models based on the Belgium case. It compares those models and discusses how social enterprises are agents of change in lending relationships. Finally, it proposes an innovative perspective explaining how alternative currency could be used to reinforce reciprocity in lending relationships.