The Business Model of Social Banks
Panu Kalmi and
Additional contact information
Simon Cornée: Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France
Panu Kalmi: University of Vaasa, Faculty of Business Studies, Finland
Economics Working Paper Archive (University of Rennes 1 & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS
Based on an extensive literature review, this paper proposes to define social banks (SBs) as social enterprises that run banking activities with the social mission of supplying credit to other social enterprises, which are typically less profitable than for-profit businesses. This definition marks our starting point for developing a theoretical framework to explain how SBs survive without subsidies in the banking market. We build on a two-pillar business model of value-based financial intermediation, which comprises an ownership structure that limits residual ownership claims and preferential credit conditions associated with financial sacrifices from motivated depositors. We also clarify the link between SBs and stakeholder banks and weigh up the importance of market interest rates for facilitating the business of SBs. An empirical analysis based on panel regressions on 5,400 European banks over the 1998-2013 period attests to the relevance of our theoretical framework. It also confirms that a low interest rate environment raises concerns about the sustainability of the SB business model.
Keywords: Social banks; European banks; Business Model; Financial Intermediation; Social Enterprises (search for similar items in EconPapers)
JEL-codes: G20 L31 L33 M14 P13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-hme
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
https://ged.univ-rennes1.fr/nuxeo/site/esupversion ... 7b-8c2d-f1655800123d (application/pdf)
Journal Article: The Business Model of Social Banks (2020)
Working Paper: The Business Model of Social Banks (2020)
Working Paper: The Business Model of Social Banks (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:tut:cremwp:2019-08
Ordering information: This working paper can be ordered from
CREM (UMR CNRS 6211) - Faculty of Economics, 7 place Hoche, 35065 Rennes Cedex - France
Access Statistics for this paper
More papers in Economics Working Paper Archive (University of Rennes 1 & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS CREM (UMR CNRS 6211) – Faculty of Economics, 7 place Hoche, 35065 RENNES Cedex. Contact information at EDIRC.
Bibliographic data for series maintained by GERMAIN Lucie ().