A decision support system for financial and social investment

Abstract

This article proposes a decision-making model that assesses the different aspects associated to Social Venture Capital (SVC) investment decisions. SVC companies buy shares of investee companies, valued according to financial and social aspects. The proposed model includes three main factors: the previous experience with the company (the past); its financial information and intangible assets (the present); and the proposed project, considering financial and social criteria (the future). The model has 26 criteria and 160 indicators, prioritized by means of Analytic Hierarchy Process (AHP). AHP simplifies a complex problem using a hierarchical analysis methodology, which enables subjective judgements among different criteria. The model has been tested in a given SVC company. Its development is explained in this article.

Keywords:

• social venture capital
• credit scoring
• social performance
• intangible assets
• expert systems

JEL Classification::

• C44
• G24
• M13
• M14

Acknowledgements

This study was made possible due to the financial help received via Grant ECO2010-20228 from the Spanish Ministry of Education and Science and the European Regional Development Fund (ERDF) under the title ‘Application of social venture capital fundamentals to microfinance’.