EESC CORNER: Building a Financial Ecosystem for Social Enterprises

The Luxembourg EU presidency highlights the fact that limited access to finance (particularly access to tailored finance) is a barrier to the growth and development of the social economy. A new social landscape is emerging in Europe as a result of the crisis and our society is facing new complex challenges. There is an urgent need for social innovation mobilizing all sectors of society.

The social economy is a vital sector employing over 14 million people and has a key role to play providing solutions for OECD, there is currently an incompatibility in the existing financing framework that does not correspond to the reality of social economy enterprises and their requirements, indicating a need for cultural adaptation of the financial, legal, policy framework to design appropriate tools. It is vital that for social finance to become sustainable, an integrated approach, different from traditional finance, must be adopted.

One key issue is that SEE business models are insufficiently known and understood. Not fully working with people in need) and no or limited second-market opportunities, create additional complications for mainstream investors.

While these instruments may successfully reach some enterprises (often as profit-maximizing businesses with a social mission), SEEs still need specifically tailored financial instruments.

Marie Zvolská,
EESC Member – Group I,
co-rapporteur on the opinion