Responsible Investment Management and Advisory Services

Lessons from Five Years of DGGF Investments

Triple Jump and PwC – on behalf of the Dutch Good Growth Fund (DGGF) Financing Local SMEs initiative – hosted the conference “Closing the SME Finance Gap: Empowering Young & Women Entrepreneurs in Frontier Markets” on October 1st at the Compagnietheater in Amsterdam. Following the release of the DGGF 5 year Impact Report earlier this year, the event provided a platform to identify which strategies work in closing the finance gap for the ‘missing middle’ SMEs in frontier markets and build new partnerships and collaborations towards the emergence of diverse and conducive local SME finance ecosystems.

With more than 200 participants, comprising many of DGGF investees, (co) investors, field builders, academics, policymakers, as well as entrepreneurs themselves, the day was filled with a mix of rich panel discussions, and interactive breakout sessions.

As stated by Steven Collet, Director of the Sustainable Economic Development Department of Ministry of Foreign Affairs of the Netherlands, “The DGGF has demonstrated that investing public funds into local SME finance providers can enable business opportunities created by local entrepreneurs to contribute to inclusive economic development, even in difficult markets. But to be a successful impact broker, cooperation is key. Today PwC and Triple Jump provide us with a great platform for exchange and cooperation.”

The morning breakout sessions focused on impact-related topics, i.e. investment strategies empowering women, youth and entrepreneurs in fragile states. In the afternoon, emphasis was on scaling approaches for a diverse finance offering, including digital finance, risk reduction, first time fund managers, and incubation/acceleration initiatives to build investment ready businesses. The sessions enabled to identify remaining critical challenges, define scale-up strategies and identify the role of the different stakeholders in the process. It was particularly valuable to have entrepreneurs from across geographies, such as Jordan, Senegal and India, share their first hand experiences and perspectives on the needs of diverse local businesses in their markets.

The event has shown that there is no one silver bullet in scaling the offer of SME finance. The solutions need to be context specific and targeted approached have to be applied. In particular:

  • Catalytic capital is necessary to demonstrate and build track record;
  • Conducive ecosystems need to be shaped ;
  • Flexibility and efficiency should drive approaches and expectations;
  • New challenges and risks at scale must be anticipated.

For more detailed insight into the main takeaways and highlights of the event, click here.