Feasible Institutions of Social Finance: A Taxonomy

Simon Cornée, Marc Jegers, Ariane Szafarz, Simon Cornée, Marc Jegers and Ariane Szafarz
Authors registered in the RePEc Author Service: Ariane Szafarz

Journal of Institutional and Theoretical Economics (JITE), 2022, vol. 178, issue 3, 280-310

Abstract: This paper unpacks the continuum of social finance institutions (SFIs), ranging from foundations offering pure grants to social banks supplying soft loans. The in-between category includes quasi-foundations granting loans requiring partial repayment. In our model, SFIs maximize their social contribution arising from financing successful social projects, under a budget constraint dictated by their funders. We determine the feasibility of each SFI category. Quasi-foundations appear to be efficient and adapted to low market rates. However, reciprocity from SFI borrowers can elicit a so-called hold-up effect, whereby the SFI charges a high interest rate to its loyal clients.

Keywords: social finance; philanthropy; foundations; social banks; socialfinance; socialbanks (search for similar items in EconPapers)
JEL-codes: D63 G21 G24 H25 (search for similar items in EconPapers)
Date: 2022
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Working Paper: Feasible Institutions of Social Finance: A Taxonomy (2022)
Working Paper: Feasible Institutions of Social Finance: A Taxonomy (2021)
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DOI: 10.1628/jite-2022-0010

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