CFF impact story

Convening to drive more capital to SGBs

The World Bank estimates that SGBs create 7 out of 10 jobs in the formal economy. Investment into Africa’s small businesses is key to economic development, however there is a systemic failure to meet the capital needs of these vital businesses.

Collaborative for Frontier Finance (CFF) is a network facilitating ecosystem change. In October 2022 CFF held the Capital Mobilisation Convening in the Hague, to mobilise institutional capital to fund local capital providers addressing the ‘missing middle’ financing gap.

The convening sought to demystify the ‘missing middle’ and help institutional investors align their investments with local capital providers. The 32 organisations that came together, including institutional investors, foundations and market building organisations, fund of funds, and local capital providers, collectively represented approximately $700M USD of capital.

CFF Capital Mobilisation Convening. The Hague, October 2022.

Critical topics included:

• How participants could progress towards becoming a collective of market builders and creators for SGB finance. 

• The need for changes in investment practices and market capital provision criteria to better suit the requirements of local capital providers. 

• The need for more flexible and better aligned technical assistance facilities to sit alongside investment capital.

Follow-on actions from the event include engaging with internal champions and key investment managers at development institutions, planning further convenings in Africa, building knowledge, and supporting new capital initiatives. In addition, CFF is working on an integrated program to assist local capital providers to set up and manage investment vehicles.