Faith-based social enterprises (FBSE) play critical roles in improving the livelihoods of thousands of individuals in areas where government services are limited or not available. The enterprises are critical in feeding the hungry, educating the poor, providing primary healthcare, and offering shelter to vulnerable communities across the globe, thus enhancing economic and social transformation.

According to a report published by the World Economic Forum, an estimated 10 million social enterprises globally generate about $2 trillion in revenue and create nearly 200 million jobs. 

Despite their prevalence, faith-based social enterprises have not been recognised for their work while limited research and policy support are provided.  A Strathmore University research conducted on the faith-based enterprises run by catholic sisters identifies the many problems that they encounter and   proposes policies that can support their growth and contribution to sustainable development.  The recent study was conducted by Dr Murithi William, Dr Ndunge Angela, and Dr Njiraini Nancy, researchers based at Strathmore Business School. In their report, “Faith-Based Social Enterprises Run by Catholic Sisters: What Policies Can Support Them to Grow in Kenya?”, the scholars decry the woes that Catholic sisters face in running their institutions.

“One of the primary challenges for FBSE is access to finance. Generally, faith-based organisations (FBOS) rely on small amounts of contribution from individual members or philanthropy from wealthy individuals,” the scholars report. They observe that policymakers have overlooked FBSEs and concentrated their policy efforts on generally addressing micro, small, and medium enterprises. The unique needs of FSBEs are not considered under the Ministry of SME and Cooperatives sessional paper no 5 of 2020. 

“FBSEs are faced with a lack of public awareness and recognition for the work they do within the communities. Whilst faith-based organisations are widely known for their contribution to addressing global challenges, rarely do they receive the recognition and awareness they deserve,” the study observes. Inadequate policy framework to support faith-based social enterprises is also cited. Due to the unique dynamics created by the combination of religious, social missionary work and business sustainability, FBSEs find it complex to navigate the already complex and sometimes ambiguous institutional framework. 

“Given the nature of FSBEs, they often encounter challenges in accessing public procurement processes. The lack of knowledge and capacity for procurement processes for government and public institutions makes it impossible to compete with other entities. Other challenges include lack of a legitimate legal framework tailored to suit the needs and models of FBSEs; and the uncompetitive market environment, which benefits large organizations,” the study reports. 

Policy options 

To address these challenges, the government is urged to support FBSEs since they contribute to significant sectors of the nation, such as health, education, food security and housing. FBOs and FBSEs are identified as fundamental agents that can spearhead the achievement of Vision 2030, hence the government should formulate policies that enhance and advance their  development and growth. 

On the other hand, policymakers are urged to adopt a systemic vision of social entrepreneurship and recognise its impact on the social and economic development of the nation. This, the scholars opine, will enhance the government and other stakeholders’ understanding to guide the development of a framework that is suitable for faith-based enterprises. 

“The government should develop a holistic legal framework tailored to support faith-based social enterprises that allows them to be registered as legal entities recognised by law without compromising their mission-driven focus on spirituality, and social and economic sustainability,” the study recommends.  The researchers also call for collaboration between the government and the private sector to create a fund geared towards supporting FSBEs’ capacity building and legal support, such as the Youth Fund, Women Fund, Uwezo Fund and Hustler Fund. “The government should also create a level playing field by legislating and providing social enterprises with access to funding, access to government procurement and tax benefits that encourage the growth of new faith-based social ventures.,” the study recommends, among several other recommendations.  

The study is motivated by the Sister Blended Value Project (SBVP), which is a collaborative effort between Strathmore University and the Association of Consecrated Women in Central and Eastern Africa (ACWECA) that supports the transformation of social ministries into sustainable social enterprises, supported by funding from the Conrad N. Hilton Foundation. 

The research project draws on case studies that were selected from the SBVP participants to understand their challenges and how this impacted their growth. The participants were: The sisters of Holy Angels, The Immaculate Heart of Mary, the Missionary Sisters of Annunciation, The Missionary Benedictine Sisters, and The Immaculate Heart Sisters of Africa. 

Article written by: Otuma Ongalo