Who buys social bank shares? Exploring individual financial and non-pecuniary motives

This paper investigates the motives of retail investors who buy shares of social banks—double bottom line financial intermediaries whose mission is to fund social enterprises. To do so, we combine survey data and behavior in an incentivized experiment to assemble a unique dataset of social bank members and non-members. Our analysis delivers three key results. First, members exhibit a significant lack of trust towards conventional banks. Second, their decision to buy social bank shares is primarily related to non-financial motives, although financial motives still play some role. Third, we find that members do not seem to buy social bank shares to boost their social reputation. As a contribution to the critical “value” versus “values” debate, our analysis notably highlights the crucial role of non-financial motives in channeling private financial capital towards investments that may not be financially attractive but that may prove essential in addressing current global societal challenges.