A stock exchange is an efficient public platform to match supply and demand. On stock exchanges, companies can issue shares or bonds which are then traded continuously.
Companies have access to a large capital pool and investors can sell their shares or bonds without delay at any time. A social stock exchange can be an attractive financing option for social enterprises with a proven business model and significant financing needs. At the moment, four social stock exchanges with trading activities are being incorporated. An overview of social stock exchanges can be found in chapter 4.9 “Social Stock Exchanges” on page 55.
Investment funds act as intermediaries between demand and supply by bundling funds from investors that they subsequently invest in certain asset classes. This approach reduces the transaction costs and the risk through diversification effects. Social investment funds apply the same principle in the social sector. They collect funds from individuals or foundations that they invest in a given sector such as micro-finance or the solar industry.
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