Finance and the social mission: a quest for sustainability and inclusion

Purpose - The purpose of this paper is to probe whether the quest for sustainability in financial social enterprise institutions leads to mission drift. Both formal and informal institutions play an important role as interventions to promote inclusion. They struggle between an explicit social mission and the implicit quest for sustainability. The debate remains on whether such organisations can achieve financial sustainability without compromising outreach. Design/methodology/approach - The study uses interviews and focus group discussions in nine different hybrid organisations involved in providing different types of financial services in Swaziland. Findings - The results suggest that smaller and informal enterprises tend to have less mission drift. Their risk mitigation and management approaches such as group liability and use of traditional governance structures are more adapted to the characteristics of the groups served. The modus operandi of larger enterprises tends to mimic mainstream lenders with risk mitigation measures that are inherently unsustainable for this type of market. Research limitations/implications - Sustainability in financial enterprises requires new contextualised models of risk management and client selection more appropriate for excluded groups. Moreover, using group lending as a measure of outreach maybe flawed. Other forms of social capital can be used to increase outreach even in the absence of group lending. The perceived trade-off between commercial gain and outreach is somewhat complex. Mission drift seems to depend on the capital structure. Originality/value - The paper contributes to an infant but important debate on how sustainability can be achieved without compromising outreach in financial institutions designed to increase financial inclusion.