Empowering circular economies: unveiling the dynamics of social business models in rural Sri Lanka

Date

2025

Authors

Wijewardena, C.
Rammal, H.G.

Editors

Ferreira, J.
Klofsten, M.
Urbano, D.

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Book chapter

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Circular Entrepreneurship Ecosystems: Challenges, Opportunities and Future Trends, 2025 / Ferreira, J., Klofsten, M., Urbano, D. (ed./s), Ch.8, pp.152-175

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Chanaka Wijewardena and Hussain G. Rammal

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Abstract

The lack of financial inclusion in rural areas of emerging economies perpetuates poverty, particularly impacting micro, small, and medium enterprises (MSMEs) unable to access financing from traditional sources. This issue gains significance within the context of the UN Sustainable Development Goals (SDGs), particularly in poverty reduction efforts. By hindering MSMEs’ access to financial resources, broader socio-economic and environmental initiatives suffer, impeding progress towards the Sustainable Development Goals. Social businesses emerge as vital players in addressing financial inclusion challenges by providing alternative financing options. However, they face difficulties evaluating the feasibility of MSMEs’ activities. The study investigates social businesses in rural Sri Lanka, aiming to understand their roles, challenges, and impacts. Applying financial inclusion and stakeholder theories, the authors explore how these enterprises support MSMEs beyond financial provision, acting as intermediaries and providing financial literacy training. In the absence of robust government intervention, social businesses become crucial supporters of rural entrepreneurs, sustaining their operations through commercial activities. Innovative approaches are needed to ensure the continued relevance and survival of social businesses in emerging economies’ dynamic landscapes.

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© The Editors and Contributing Authors Severally 2025

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