Supporting Innovation Ecosystems with Microfinance: Evidence from Brazil and Implications for Social Entrepreneurship

Abstract

Considering a social enterprise's relationships with complementors, suppliers, and customers within the broader context of an innovation ecosystem can help advance theory in the field of social entrepreneurship. Our qualitative study examines microfinance organizations in bottom-of-the-pyramid communities in Brazil. Our findings indicate that interactive relationships with complementors, suppliers, and customers can improve the microfinance organization's ability to support commercial transactions, manage financial capital, and educate customers, thereby improving its ability to facilitate economic development. These findings extend the literature on innovation ecosystems, microfinance, and social entrepreneurship.

Demand-side Perspectives in International Business: Themes and Future Directions

“…Venturing beyond value chains (Porter, 1985), some companies have developed collaborative engagements involving economic transactions and institutional arrangements between suppliers, users, and complementors (Normann and Ramirez, 1993;Stabell and Fjeldstad, 1998). Complementors are organizations that are not direct competitors of the focal firm, but that provide complementary products or develop a business infrastructure valuable for a focal firm's new product or business model to succeed in the market (Adner and Kapoor, 2010;Priem et al, 2013;Siqueira et al, 2014). In an increasingly interconnected world, some firms are able to create more value than any single firm could alone by coordinating innovation ecosystems that cross industry boundaries and national borders.…”

“…This includes all essential stakeholders and value chain members, as well as co-innovators and co-adopters necessary for success in the marketplace. Business ecosystems represent contexts in which the success of a value proposition depends on building an alignment of organizations that must work together in order to transform an idea into a practical success (Priem et al, 2013) in for-profit markets (Adner, 2012) or social entrepreneurship settings (Siqueira et al, 2014).…”

Financial inclusion and poverty: The transmission mechanisms

“…Moreover, financial exclusion is 'deeply integrated with social exclusion'. As a result, social entrepreneurship may be better placed to address financial exclusion and to ameliorate the market failures so commonly at play in financial markets (Ault 2016;Rosengard 2004Rosengard , 2009Siqueira, Mariano & Moraes 2014; The consequences of these market frictions are that Pareto improvements are not exhausted resulting in inefficient allocation of financial services. As a result, large populations especially in developing countries remain either underserved or not served (Burkett & Drew 2008;Park & Mercado 2018).…”

Call for Papers

“…Micro-financing as a means of 'banking for poor' has received greater attention in the last decade as a social entrepreneurship concept, when Dr. Yunus, the prime explorer of this concept in the postmodern economy, won the Nobel prize in 2006 (Counts 2008;Gebremariam 2010). Since then, 'microfinance' has become one of the key issues in the contemporary social business research and practice, especially in the context of social entrepreneurship (Karlan and Valdivia 2011; Dorado 2013; Nega and Schneider 2014; Washington and Chapman 2014; Siqueira et al 2014;Bruton et al 2015;Moss et al 2015). However, Seibel (2005) reported that: the birth of microfinance in Europe dates back to tremendous increases in poverty since the 16th and 17th century.…”