The extent of bankers' awareness, attitude towards social enterprises Dissertation - 1

The extent of bankers' awareness, attitude towards social enterprises business modes and social enterprises' ability to attr - Dissertation Example As far as financing of social enterprises are concerned, they are two sources of finances- grants and non-grants. It is, however, interesting to note that majority of social enterprises do finance their social activities through grants provided by various government or non-government institutions. The share of the grants provided by public agencies is much higher. In other words, social enterprises do mainly resort to government grants funding for fulfilling their social objectivities. (Anderson, Dees and Emerson, 2002; Guclu, Dees, and Anderson, 2002; Social enterprises have to depend on external sources of finance for fulfilling their social objectives as most of the time they are incapable of generating enough revenues from their business activities to finance their social activities (Dees, 1994). The more interesting thing to note that is they do not rely much on non-grants finance as an external source of their finance. Grant-dependency among social enterprises is quite prevalen t even if grants impose certain kind of restriction on their activities (Anderson, Dees and Emerson, 2002; Alter, 2006). ... (Dees, 1994; Blau, 2005). Problem statement Of course, popularity of non-grant finances like debt finance, equity finance etc have increased over time among social enterprises. Many experienced social enterprises are now using mixed approach of financing whether their combining grant and non-grant finances to finance their social activities. However, on average, non-grant finances are still less popular in comparison with grant finances and hence, the problems that social enterprise face while using grants still persists and work as obstacles in the path of realization of their goals. (Wei-Skillern, Leonard, and Stevenson, 2007; Dees, 1994) There are certain reasons behind less-dependency on non-grant finance, particularly lending which is considered to be one of the most common sources of finance for any business enterprise. The managers and founders of social enterprises generally claim that traditional lender like banks do not aware of their special needs and have a negative attit ude relating to the issue of extending loans to them. This claim is partially true. From the viewpoint of a lender, particularly of a banker, the flow of revenue and the capacity of paying all the debts with interest are the key factors and criteria for assessing the loan application of any organization. However, repaying loan with interests is certainly a challenge for the managers of those enterprises that operate in order to meet some social objectives. (Dees, Emerson, and Economy, 2001; Blau, 2005) Since social enterprises’ operational objectives are distinct from those of conventional business enterprises, the criteria for assessing applications for loans should not be same as