Purpose: Small and medium-sized entities (SMEs) operating in the alternative financing sector are typically heterogenous in nature making them differ greatly from traditional banks. Where traditional banks must comply with strict banking regulations, developing uniform regulations for the alternative financing sector remains a challenge. This paper examines the current challenges and solutions from a sociological and institutional perspective in developing standards for SMEs operating in the alternative financing sector in the Netherlands. Adopting minimum quality standards should lead to increased transparency and public trust in the non-banking sector.
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This paper provides insights into the operational features of community-based financing mechanisms. These include CAF groups, which are self-financed communities where people save and lend money to each other. The implementation of such self-financed communities in the Netherlands is supported by Participatory Action Research (PAR). This paper discusses the first results of this research by exploring whether and how participation of group members can improve their well-being with regard to social networks, financial household management and entrepreneurial positioning based on the capability approach of Amartya Sen, a well-known economist. For this PAR, three groups were formed, guided, observed, analysed and compared. This paper demonstrates how solidarity economy processes at the grassroots level can contribute to the general well-being of vulnerable people in the Netherlands. For the particular context of overconsumption, inequality and overindebtedness, Sen’s notion of freedom will be reconsidered and adjusted.
Why is it that we know and still act as if we do not know? SMEs are considered engines of job creation and therefore growth and generation of income but is it really true that the solo self-employed and micro entrepreneurs will become small or medium entrepreneurs, e.g. graduate? We knew in the 80’s that this assumption needed to be looked at critically. Research revealed that graduation hardly existed. Practitioners in MSME support and development programmes entertain few illusions about their programmes actually leading to graduation, while NGO and Government policy officers, from behind their desks, often presume that graduation occurs frequently. Actual graduation rates and the extent to which they can be attributed to interventions remain an unresolved and important issue. After more than three decades it is justified to the question whether it is still true that graduation hardly exists? If that is the case one needs to take a critical look into prevailing policies and programs in support of the SME sector.
