RuEn

Journal section "Public finances"

Financial Tools to Develop Social Entrepreneurship

Popov E.V., Veretennikova A.Y., Kozinskaya K.M.

Volume 12, Issue 5, 2019

Popov E.V., Veretennikova A.Yu., Kozinskaya K.M. Financial tools to develop social entrepreneurship. Economic and Social Changes: Facts, Trends, Forecast, 2019, vol. 12, no. 5, pp. 91–108. DOI: 10.15838/esc.2019.5.65.6

DOI: 10.15838/esc.2019.5.65.6

Abstract   |   Authors   |   References
Social entrepreneurship, being a relatively new activity for the Russian economy, requires the development of conditions and support mechanisms; this helps address social issues in society and also stimulates civic activity in this regard. Our paper classifies financial tools according to types of investors with different financial requirements, and analyzes the availability of these tools for the development of social entrepreneurship. We place special emphasis on mezzanine financing, social impact bonds, impact investing, and hybrid financing. In order to determine the availability of financial tools that are used to develop social entrepreneurship in Russia, we analyze financial statements of social entrepreneurs included in the catalog, formed by the Fund “Our Future”. The analysis used the coefficients of autonomy, current liquidity, profit (EBIT) and its growth rate in 2017. We have revealed that only nine of the considered organizations, which is less than 22%, meet the stated requirements and can apply for loans. Thus, we show that it is necessary to develop investment tools with lower financial requirements. Theoretical importance of our research findings consists in the fact that they expand theoretical and methodological provisions for studying social entrepreneurship in terms of systematization of financial tools used in international practice. The findings of our research are relevant in the practical aspect as well, because they help identify low availability of financial tools used in the Russian practice. The obtained data can be used to elaborate a strategy for development of this type of activity at different levels of management

Keywords

accessibility, financial tools, social entrepreneurship, impact investing, social impact bonds

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