Community based enterprises are also called social enterprises.
The UK Department of Trade and Industry definition of social enterprise i businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners"
How are community based enterprises different from micro-enterprise?
Micro-enterprises are often small-scale, vulnerable to competition, under-capitalized and unable to generate many jobs. They are usually owned by one proprietor or a single family. If they do make more than a basic living for the owner, the profits are privately accumulate
Community based enterprises have the potential to be larger scale, generate more jobs and return benefit to the community beyond those directly employed. They can be run as a worker-owned cooperative or as a member-based association.
In many parts of the majority world there is a role for community based social enterprises to help strengthen local economies.
Enterprise Development and Community Economic Development.
Business growth is seen to be one of the main ways of promoting economic development. But there are many different forms of business and not all put community wellbeing at the centre of their operations. While privately owned businesses might employ local people, the wealth they produce is accumulated and invested or expended by the business owners often elsewhere.
The only way to ensure that the wealth generated locally is used to improve livelihoods locally is for the community to take charge of enterprise ownership and development. Community based social enterprises are distinctive in that they organize their business activities around providing community benefit directly.
They can provide purposeful employment and cash income for marginalized people
-add value to agricultural produce
- stop the leaks of cash out of the community by supplying products for local consumption
-allocate surpluses to community projects
-use surpluses to spin off more community enterprises
-allow people to develop as economic decision-makers and actively engaged citizens