Catalyzing Green Growth: a Blended Finance Framework for Social Enterprises

Abstract

This paper develops a conceptual framework for applying blended finance to social enterprises, drawing on insights from social enterprises in India. The study examines how social enterprises balance impact with business viability, identifies their unique risks, and analyzes how blended finance can address these challenges. The proposed framework illustrates how concessional capital, investment capital, and technical assistance can mitigate financial, operational, and market risks while enhancing environmental impact. The paper concludes that effective blended finance for social enterprises requires longer time horizons, results-based components, policy risk mitigation, value chain approaches, and local adaptation. Recommendations are provided for policymakers, investors, entrepreneurs, and researchers to advance blended finance applications in environmental sustainability.