Reputational Risk and impact assessment of Corporate Social Responsibility on Profitability and Growth of Manufacturing Companies in Nigeria

Abstract This issue of the International Journal of Economic Development is a special symposium on microcredit programs in developing, developed and transitional economies. This introductory paper reviews current issues debated among advocates, critics and policy-makers in the microcredit field and weaves in symposium papers as examples for more detailed study. Even though the symposium covers much material, it cannot do justice to this rich field of endeavor. Introduction Poor people, especially women, could contribute to wealth creation of nations and improve their own quality of life if they could start, maintain or grow a small business. When poor people do not participate in self-employment or seek to employ others, economies waste human capital and governments incur great expense in supporting poor, dependent populations. But poor people often lack capacity necessary to become economically independent and they cannot fully access societal resources to help in attaining this goal. Poor people are often under-educated, inexperienced in business, in poor health, saddled with large families they can barely care for, isolated in rural villages or urban ghettos, or discriminated against because of race, religion, ethnicity or gender. Poor people lack access to capital necessary to drive existing or potential businesses, for want either of personal assets or collateral, or of financing from friends, family or acquaintances willing to invest. As such, credit from banks or other formal financial institutions, the engine of economic growth in every country, eludes poor people, holding them down. Microcredit programs offer loans and/or technical assistance in business development to poor people. Generally, programs have one or more of three goals: (1) improvement of self-sufficiency and welfare of poor entrepreneurs, (2) development of stable sources of income and full-time employment, and (3) expansion of microenterprises to a larger firms (OECD, 1996). Recent microcredit programs owe their development to dissatisfaction with earlier methods of aiding poor populations in developing countries. These were often large infrastructure or public works projects that frequently failed to meet poor people's needs (Cassen, 1993). Microcredit programs of all stripes have exploded in popularity in the 1990s, although they have been in existence since the 1960s. Adams and Von Pischke (1994) note, however, that microcredit programs of today are based on exactly the same rationale as failed programs to help small farmers in the past. In the United States, more than 200 microcredit programs exist, offering targeted groups loans from $200 to $25,000, occasionally more (Sevron, 1997; Edgcomb, Klein and Clark, 1996; Shorebank Advisory Services, 1992; Himes and Servon, 1998). Cumulatively through 1996, U.S. microcredit programs served 200,000 people in 54,000 businesses with loans over $44 million (Edgcomb, Klein and Clark, 1996). Hillary Clinton recently drew national attention to the need for such programs through speeches and news conferences. The U.S. Small Business Administration added microcredit to its portfolio of finance and technical assistance programs for small business. Community Development Agencies (CDCs) have broadened their activities to include microcredit. The U.S. Department of Treasury provides incentives for financial institutions to invest in microenterprise in its Community Development Financial Institution (CDFI) initiative. Banks, feeling pressure from federal legislation--Community Reinvestment Act--requiring them to invest more capital in poor neighborhoods and sensing some untapped market opportunities in microcredit, often fund programs. Charles Mott Foundation and Ford Foundation began to fund microcredit programs, evaluate them, and publicize their successes and best practices (Shorebank Advisory Services, 1992; Community Economics Corporation, 1993; see also, Economic Opportunities Program, 1997). …