Social Enterprises

Abstract

Is social enterprise new to India? To answer this question, one should consider what the so-called social enterprise involves. The enterprise should primarily chase a pre-defined social objective.  By extension, the profit objective should be sub-ordinated to the social objective. If so, the question that arises is whether such an enterprise can qualify as a social  enterprise. Or whether the said enterprise should take up social activity first and entrepreneurial activity next, to qualify as a social enterprise.This obviously has to be the answer, although the two activities, namely social activity and entrepreneurial activity ,at least in theory, cannot co-exist. But co-exist they must, if social enterprise has to materialise and thrive. The next question is, whether in such a case, could microfinance or any microcredit activity for that matter, qualify as a social enterprise. After all, several microfinance activities are driven by lofty goals.  The answer, at least in the Indian context, is that it would, subject to certain conditions being met. In fact, bank-led / financial institution-led microfinance or microcredit did debut in our country, with such lofty goals underlying it. However, somewhere along the way, it took a wrong turn and lost its way.  It devolved into yet another type of bank loan, in turn devolving into a kind of chaos. The researchers interaction with the respondents led him to conclude that upskilling the beneficiaries should precede financing the beneficiaries, if social objective-driven microfinance activities are to metamorphose into successful social enterprises. By and large, it often happens in the reverse order in our countrys microfinance space -- financing the beneficiaries precede upskilling the beneficiaries. It has led to a situation where a significant chunk of the beneficiaries has been financed beyond its needs and in many cases, by more than one financier, leaving the beneficiaries unable to service the debt they contracted.  The unhealthy practice of several microfinance players financing the same beneficiariescan be effectively checked if the social objective-driven microfinance beneficiaries could be persuaded to metamorphose into successful social enterprises.