Published Paper Details:

Social enterprise is an emerging concept which blurred boundaries that demarcate the for-profit and nonprofit sectors by combining social mission and profit-making objectives. In Ethiopia, social enterprise assumes legal forms and subject to a legal regime designed for conventional business and charity. Though it is a growing sector, social enterprise has been facing many challenges that hinder its growth and reduce its social impact. The purpose of this paper is to explore challenges facing social enterprises and offers a set of recommendations to address it. As the finding has revealed, the challenges facing social enterprises are broadly legal and institutional, socio-cultural, and finance and support related challenges. The legal and institutional challenges follow from the inadequacy of the existing legal regime of conventional charity and business to address the special regulatory concerns of social enterprises. Challenges relating to a dearth in the existing legal regimes include the absence of a system of recognition and regulation, lack of clarity of concepts (social enterprise and its social purpose and activity), unsuitability of legal forms, prioritizing diverge missions and interests, absence of social impact reporting and measurement, governance and regulator, and determination of the amount of profit distributed to shareholders and reinvested for a social purpose. The socio-cultural challenges facing the social enterprise is mainly associated with lack of social enterprise and social entrepreneurship in education curriculum, low awareness about social enterprises, lack of real motive of entrepreneurs to create positive social change, stiff market competition, and absence of partnership among actors. The other challenges facing social enterprises are access to finance (equity, grant, debt), land, and support. The degree of these challenges pose is different for for-profit and nonprofit social enterprises. To address challenging facing social enterprise and scale up their social impact the researcher called for the adoption of collaborative approaches by stakeholders.