Social finance: commerce and community in developing countries

This paper adopts the conceptual framework of institutional analysis and development (IAD). The main focus is on the “commons,” a general term referring to a resource shared by a group of people or a community who are possibly vulnerable to social dilemmas. In this paper, the vulnerable are communities in developing countries; the resource is economic and social wellbeing; the dilemma is how this wellbeing can be shared. Social finance, among others actions, might be a means of reaching a favorable outcome. The purpose of this paper is to identify institutions in the developing world where a commons approach is attempted.

A major part of the research consists of examining knowledge, specifically digital knowledge, as a commons, and then looking at situations in developing countries where information and communication technology plays a prominent role. The spotlight is on the widespread use of cell phones to meet social, business, and service needs. The paper is designed to observe and report on the competing or converging concerns of profit‐making enterprises and impoverished communities. The role of social finance in promoting prosperity and higher living standards lies at the heart of social finance. At once, a conceptual and empirical issue, a case study of mobile banking in sub‐Saharan Africa is presented to achieve an understanding of a commons dependent on digital knowledge.

While the data generally revealed that telecom's technical innovation results in an overall economic and social gain for developing countries, the precise financial effect of mobile telephony is less‐easily demonstrated, as might be expected with so many variables to be considered.

The value of IAD is uniquely manifest in the institutional analysis of mobile telephony in a developing region, namely, sub‐Saharan Africa. The knowledge commons of shared ownership and self‐governance is shown to benefit all parties without hindering financial gain or the common good.