Towards a hybrid-financing model for local development companies: Between business angels and waqf

Abstract

Local Development Companies (Sociétés de Développement Local – SDL) represent a key institutional instrument for territorial public policy implementation in Morocco within the framework of advanced regionalization. However, their financing model remains structurally fragile, characterized by a high dependence on public subsidies, limited attraction of private capital, and persistent weaknesses in financial governance.

This paper adopts an integrative conceptual review to examine the limitations of the current SDL financing model and to explore the conditions for sustainable resource diversification. It formalizes a hybrid financing framework combining Business Angels, providers of seed capital and entrepreneurial expertise, and Waqf, as a patient capital mechanism with social orientation, structured through a dedicated Special Purpose Vehicle (SPV).

The analysis demonstrates that the hybridization of entrepreneurial and philanthropic capital may reduce budgetary dependence, strengthen financial governance, and enhance the sustainability of territorial projects within a blended finance perspective aligned with the Sustainable Development Goals. The main contribution lies in the development of a structured conceptual framework tailored to the Moroccan context, enriching the literature on innovative territorial financing mechanisms in emerging economies.

JEL Classification: G32, G24, H70

Paper type: Theoretical Research (Integrative Conceptual Review).