Feasible Institutions of Social Finance: A Taxonomy

Simon Cornée, Marc Jegers and Ariane Szafarz

No 21-001, Working Papers CEB from ULB -- Universite Libre de Bruxelles

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 (search for similar items in EconPapers)
JEL-codes: D63 G21 G24 H25 (search for similar items in EconPapers)
Date: 2021-01-28
New Economics Papers: this item is included in nep-cwa, nep-hme and nep-mfd
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Feasible Institutions of Social Finance: A Taxonomy (2022)
Working Paper: Feasible Institutions of Social Finance: A Taxonomy (2022)
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