A New Force for Poverty Reduction? An Analysis of Peru’s Emerging Social Enterprise Sector

Abstract

This thesis aims to analyze the implications of Peru’s growing social enterprise on poverty reduction and development. It begins by highlighting the trends that led to the emergence of social entrepreneurship and synthesizing definitional debates. This thesis proposes its own definition of social enterprises as innovative organizations that prioritize social mission while pursuing financial sustainability. It identifies the benefits of social enterprises acting as agent of development, concluding that they can generate positive impacts because of their creative solutions to persistent issues and their strong understanding of local communities. At the same time, it acknowledges that social enterprises are often limited by their inability to solve for the structural causes of poverty. It then assesses the situation in Peru, finding a lack of government intervention and engagement with the social enterprises. It provides an in-depth evaluation of a Peruvian social enterprise, identifying the strengths and weaknesses in its operations. Finally, it presents lessons learned, best practices, and policy recommendations that suggests how social enterprises can be a viable component of Peru’s development strategy. This thesis concludes that social enterprises can indeed be a powerful force for poverty reduction.