Integrating CSR with Microfinance: A New Model for Sustainable Small Business Development in India

Abstract

This paper explores the strategic integration of Corporate Social Responsibility (CSR) with Microfinance Institutions (MFIs) as a new model for promoting sustainable small business development in India. The study arises from the growing need to create inclusive, long-term, and economically viable support systems for small entrepreneurs, especially in rural and semi-urban regions. The research investigates how CSR funds can be deployed through microfinance mechanisms to address the persistent financing gap among small enterprises and self-help groups (SHGs). By analysing CSR expenditure trends of Indian corporates from 2016 to 2022 and the evolving performance of MFIs, the study proposes a hybrid CSR–Microfinance model. The model aligns corporate ethical commitments with sustainable entrepreneurship development goals. Using mixed research methods—secondary data analysis and case-based review—the paper highlights the operational feasibility, financial implications, and policy relevance of such integration. Findings suggest that linking CSR funds to microfinance programs enhances both social impact and financial sustainability while promoting self-reliance among micro-entrepreneurs. The paper concludes by recommending structural incentives, regulatory support, and performance-based CSR frameworks to accelerate the adoption of this integrated approach in India.