While social enterprises have been contributing to solving social problems such as employment of the vulnerable and expansion of social services along with quantitative growth, their limitations are also revealed, such as their small size, concentrati...
While social enterprises have been contributing to solving social problems such as employment of the vulnerable and expansion of social services along with quantitative growth, their limitations are also revealed, such as their small size, concentration in job provision type, and dependence on government subsidies. Against this background, this paper examines the current legislation and legal discussions based on social enterprise financial support, draws implications for social enterprise financial support in Korea through a review of overseas cases such as the United States, the United Kingdom, and Spain, and suggests ways to improve social enterprise financial support.
Since the enactment of the Social Enterprise Promotion Act, 22 amendments have been made to the Act and new laws have been proposed, but financial support for social enterprises is still centered on direct financial support, and an ecosystem for financing or an investment environment has not been created.
As a result of reviewing overseas cases, focusing on the United States, the United Kingdom, and Spain, It found that, first, major countries have found limitations in financing social enterprises and are diversifying their financing methods from direct financial support such as government subsidies to solidarity funds and mixed funds with private capital matching; second, when focusing on vulnerable employment, they are providing more direct financial support than before to increase the sustainability of enterprises, while also providing regulatory provisions that allow enterprises to continue to pursue their social purpose; and third, connecting with the community is not only in the content of the business but also in the level of financing.
Regarding the current status of social enterprises, they can be reclassified into three main types: Labor-integrated, Social problem-solving, and Cooperative or Solidarity social enterprises. The labor-integrated type needs to be supported by expanding direct financial support such as labor cost support, while the social problem-solving type needs to attract market and private investment and create a financial ecosystem to facilitate financing through the financial sector. In the case of cooperative or solidarity type, it is necessary to develop a legal system for the establishment and operation of a fund and the revitalization of financial cooperatives, taking into account the characteristics of the legal entity, and this should be done in conjunction with the discussion on the revision of the Basic Act on Cooperatives, rather than limited to the Social Enterprise Promotion Act.