Social enterprise: constraints and opportunities – evidence from Vietnam and Kenya

March 2014 William Smith and Emily Darko

ODI – Social enterprise has been a broadly defined term, poorly understood at the level of country and sector context specific activity. This paper synthesises findings, based on case studies of social enterprises operating in the agriculture and health sectors in Kenya and Vietnam. Main conclusions are that the concept of social enterprise needs to be clearly defined if governments and donors want to give preferential support to such organisations and that defining social enterprise as a hybrid business model facilitates identification and analysis of enterprise models that are distinct from mainstream business. The research found that the social enterprises covered in the survey were often small, personality driven, and internationally supported. Social enterprises face special constraints linked to their hybrid business model: access to finance, human resources, legal status, difficult markets, and management weakness. Market and state failure creates niches for social enterprise: serving disadvantaged communities, managing public infrastructure, and creating environmental benefits. Governments, donors and promoters should assess the niche for social enterprise in specific market contexts in place of blanket promotion of the concept.

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