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The “Missing Middle” is More Complicated

Posted By Heather Soehn, Upaya Social Ventures, Tuesday, November 27, 2018
Updated: Tuesday, November 27, 2018


In our industry of impact investing, there has long been a lament that small and growing businesses (SGBs) are the “missing middle” of the space—these are the companies that are too large for microfinance funding and too small for traditional investors or even most impact investors. The Aspen Network of Development Entrepreneurs defines this space as companies seeking to raise between $20,000 and $2M US with between five and 250 employees.

The conversation has been going on for years, first defined with great clarity in the Monitor and Acumen Fund study, “From Blueprint to Scale” in 2012.  Upaya’s Sachi Shenoy picked up the issue of a “pioneering capital gap with Brian Arbogast in 2013 and then revisited it with our board member, Nathan Byrd, earlier this year. A common theme of all this investigation is that while the potential for impact can be huge in this space, investing here requires patience, capacity building and a lot of risk.

Upaya invests exactly in the “missing middle” and for years we have felt—If not completely alone—pretty lonely.  We invest to create jobs for the extreme poor, which gives us a very particular approach to enterprise selection. While there has been much discussion, there have not been dramatic shifts to address the gaps. Players are entering the space but there is still a $930 billion financing gap. What is going on?

“This Missing Middles,” a report commissioned by the newly-created Collaborative for Frontier Finance dissects this segment with much greater granularity than ever before. It has not been helpful to talk about a financing gap for these kinds of companies because “these” kinds of companies are quite diverse.  The report helpfully breaks them down into four groupings:

  • High Growth – Disruptive business models that could be tech-led, asset-light, growing at 66% in the CFF study.
  • Niche – Innovative products or services targeting niche markets
  • Dynamic Enterprises – “Bread and butter” businesses (trading, manufacturing, etc.) that have moderate growth and scale potential but significant livelihood impact
  • Livelihood Sustaining – Sustainable businesses that may have outgrown microenterprise and are supporting families with incremental growth

This report resonates with us so well because conversations with other seed stage or early stage impact investors sometimes remind us that “one of these things is not like the other.”

Upaya looks for companies that can be sustainable job-producers that return our investment, preferably with some upside. It’s not that we lack the ambition or focus of other early investors who are looking for “rocket ships” or “massive scale.” It’s that we know our market. The “Dynamic Enterprise” group is a very good description of many of the companies that we see and want to help reach 1,000+ sustainable jobs.

In what might be a surprise, the high growth ventures are generally on a trajectory to create fewer jobs due to their business model. So we wish them well, along with our colleagues who invest in them, but they’re less interesting to us unless there’s strong job creation. (As an aside, these are also the kinds of businesses that directly refute Mulago Foundation’s Kevin Starr’s post in the Stanford Social Innovation Review from August. The only key to poverty alleviation is not making sure that the companies that provide goods and services to the poor can scale; starting with a reliable job and income is a more direct assault on poverty, even if it comes in 1000-person increments.)

What this study does so well is explain why the “missing middle” has felt stuck for so long. It’s not that there’s not enough interest in funding these companies. It’s that we need to be more creative in our approach. There is no one financing solution for these different kinds of enterprises. So many impact-driven organizations, including Upaya, are making fairly straight-forward equity investments. In fact, the typical venture style equity investment doesn’t fit well with any of these groups. Even the high growth ventures, which account for only 1% of the segment, are likely to need longer time horizons than closed-ended funds provide.

Upaya had already started exploring what investment alternatives are available to us as a foreign investor in India, but this report gives us renewed energy. It also underscores that what we do really matters. There are not enough impact investors focusing on the “bread and butter” businesses that are the “backbone of local economies and are important sources of jobs for low- and moderate-skilled workers.”  Hopefully, with a better understanding of the environment we’re working in, investors can all be more successful in achieving our impact goals by better serving the entrepreneurs in our portfolios.



This piece was written by Kate Cochran, CEO of Upaya Social Ventures and was originally posted on the Upaya Social Ventures blog.

Tags:  impact investing  Job Creation  missing middle  Pioneering Capital  Social entrepreneurship  social impact 

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The Future of Fresh: Rethinking Our Food Systems at The First Mile of Distribution

Posted By Paula Rodriguez, InspiraFarms, Monday, November 12, 2018
Updated: Monday, November 12, 2018

To all ANDE members, this is a formal invitation to join InspiraFarms side event, The Future of Fresh: Rethinking Our Food Systems at The First Mile of Distribution, the 20th of November, 2018, 6pm. 

We will follow the Financial Times Global Food Systems event with food, drinks and a vivid discussion around challenges and solutions for first-mile distribution, emerging market agribusiness competitiveness and sustainability, and their access to export markets in the UK and beyond.

InspiraFarms CEO, Tim Chambers, will open the event, and welcome our key note speaker Dan Haglund, Senior Private Sector Development Adviser, at the Department for International Development (DFID) who will talk about ‘The role of the private sector in transforming the global food industry into a more sustainable and inclusive system.’

We will present the international joint research project, in partnership with the private sector, DFID and the Shell Foundation, analysing solutions to post-harvest food losses and sharing insights from ongoing field trials.

Julie Hanson, European Director of the Global Cold Chain Alliance, ‘The cold chain industry’s response to the first mile distribution challenge.’

The event will conclude with the debut of a new mini-documentary, ‘The Future of Fresh - rethinking our food systems at the first mile of distribution’.

Join us!!

To register send us an email to

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Tags:  agribusiness  Agriculture  impact investing 

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CIPE and New Markets Lab Event on Digital Economy

Posted By Marc Schleifer, Center for International Private Enterprise, Monday, November 5, 2018
The Center for International Private Enterprise and New Markets Lab invite ANDE members to join on Wednesday, November 7, 9:30-11:30, for a discussion on improving the enabling environment for the digital economy - vital to putting the "growth" in small and growing businesses. Link to register to the event is here: The discussion will feature Katrin Kuhlmann of NML and Louisa Tomar of CIPE, among others. The event will be held at CIPE's office, 1211 Connecticut Avenue NW, Suite 700, Washington DC. The discussion will focus on the new CIPE and NML publication, Digital Economy Enabling Environment Guide: Key Areas of Dialogue for Business and Policymakers, 

Tags:  advocacy  digital economy  enabling environment  policy  technology 


Chipping Away at the MSME Financing Gap

Posted By Emma Marks, Small Scale Sustainable Infrastructure Development Fund, Monday, November 5, 2018

MSMEs are widely regarded to be among the primary drivers of economic development, employment, and innovation in emerging economies. However, a disproportionate number of MSMEs face challenges accessing the financial services they require to cover their day-to-day operations and scale into robust, sustainable businesses. Often, they have needs that exceed microfinance ceilings, and they cannot access financial services through banks or similar providers without established credit histories, well-documented business records, or sufficient collateral. Likewise, traditional banks tend to overlook potential MSME clients due to actual and perceived risks, transaction costs, and a general lack of familiarity with pro-poor business models.

The latest article from S3IDF advocates for tools like loan guarantees as a means to addressing the root causes of financial exclusion. By having “skin in the game,” banks and other financing institutions are more likely to engage seriously with the assessment process in a manner that will leave them better positioned to finance similar deals in the future and to extend other financial products and services to other MSME clients.

Tags:  access to finance  emerging markets  inclusive innovation  missing middle  social impact 

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Need Help Identifying Your Organization’s Legal Needs? Find Out About TrustLaw’s Legal Health Check for Social Enterprises.

Posted By Flavie Fuentes, Thomson Reuters Foundation, Friday, October 19, 2018
Updated: Friday, October 19, 2018

Who we are? TrustLaw is the Thomson Reuters Foundation’s global pro bono legal program, connecting the best law firms and corporate legal teams around the world with high-impact NGOs and social enterprises working to create social and environmental change. We help produce groundbreaking legal research and offer innovative training courses worldwide. We also provide a legal training for social enterprises and impact investing that focuses on legal issues and trends in the burgeoning social innovation sector, and provides lawyers with the skills and knowledge they need to advise clients. We have supported grassroots organizations to employ their first staff members, helped vulnerable women access loans to start their first businesses and brought renewable energy lighting to slums. We are the largest global pro bono network with almost 5,000 members across more than 175 countries. We work with hundreds of legal teams representing over 120,000 lawyers who generously provide free legal support to thousands of NGOs and social enterprises.

What is the Legal Health Check and How Does it Work? Every year, TrustLaw receives and reviews hundreds of legal questions from our NGO and social enterprise members around the world and connects these organizations to pro bono lawyers who provide free expert advice and assistance. Drawing on our experience, TrustLaw has developed a Legal Health Check to assist NGOS and social enterprises identify some of their operational legal needs. While it includes the questions most frequently asked by our members, it is not a complete list of legal issues. The Legal Health Check will help you identify legal matters that are relevant to your organization and issues that you might need help with. Take a look at the Legal Health Check for more information here.

Interested in Becoming a Member of TrustLaw? If you would like to apply to become a member of TrustLaw, you can complete our application form on our website at and make sure to tell us that you are also an ANDE member!

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Tags:  Access to Finance  ANDE Members  ANDE publication  Impact investing  Legal Working Group  Pro Bono  social enterprise  Social entrepreneurship  social impact 

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GroFin wins the 2018 Finance for the Future Award in Building Sustainable Financial Products category

Posted By Shailen Neewoor, GroFin, Wednesday, October 17, 2018
Updated: Thursday, October 18, 2018

GroFin is pleased to announce that it is the winner of the Finance for the Future Awards, in the Building Sustainable Financial Products category. 

Finance for the Future Awards is run by ICAEW (Institute of Chartered Accountants in England and Wales) and A4S (The Prince’s Accounting for Sustainability Project) along with their partner Deloitte. The prestigious awards saw nominees, in the different categories, such as HSBC (UK), Coca Cola and Standard Bank Group amongst others. 

With the Building Sustainable Financial Products category, the nominees competing with GroFin were Abundance Investment (UK), Environmental Finance (UK), QBE (Australia) and Yes Bank (India).

The award ceremony took place in London on the 16th of October and GroFin was represented by its CFO William Morkel who collected the award on behalf of the company. 

“I would like to dedicate this award to our employees, as well as our clients and investors. It is testimony to the collective effort we undertake here at GroFin to bring about positive social and financial impact in the lives of the people we serve,” says Guido Boysen - GroFin CEO. 

Finance for the Future Awards is held every year and has six categories namely; Embedding an integrated approach, Innovative project, Communicating integrated thinking, Investing and financing, Building sustainable financial products and Driving change through education, training and academia. 

About GroFin

GroFin is a pioneering private development financial institution specialising in financing and supporting small and growing businesses (SGBs) across Africa and the Middle East. We combine medium term loan capital and specialised business support to grow SGBs in emerging markets. By successfully combining medium term loans and specialised business support delivered through our local offices, we have invested in over 700 SMEs and sustained over 88,150 jobs across a wide spectrum of business activities within the 15 countries in Africa and Middle East that we operate in.


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Survey: Gender-lens Investing in LAC

Posted By Daniela Moctezuma, Value for Women, Tuesday, October 16, 2018

Are you an investor or organization supporting SGBs actively in Latin America and the Caribbean (LAC)? Please take 15 minutes to fill out the Value for Women survey on Gender-lens Investing in LAC, financed by the ANDE Catalyst Fund that seeks to provide investors, SGBs, and other ANDE members with a clear landscape of how impact investors use and see gender in their work. The survey will also serve as a way to identify best practices so please fill out and share your work with us!

Please fill out the Spanish language survey here before 11:59pm (Mexico City, Central Standard Time) on November 5th.

In case the link above does not work please click here:

 If you have any questions, please write to Luis Márquez ( with a copy to Daniela Moctezuma (

Thank you!

Tags:  ANDE Members  entrepreneurship ecosystems  impact investing  impact investment  Latin America  social entrepreneurship  social impact 

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Global leaders in impact investing recognized by GSG

Posted By Administration, Tuesday, October 16, 2018

New Delhi - 8 October 2018: The catalysts of the global impact movement have been recognized by the Global Steering Group for Impact Investment (GSG) at the 4th annual Impact Summit on 8-9 October in New Delhi.

The annual GSG Honors and GSG Millennial Honors celebrate the individuals and organizations radically reshaping how measurable impact on people and the planet is reflected in financial decision-making.

GSG Honors

The GSG Honors rewards and recognizes the outstanding individuals and organizations catalyzing the growth of the sector through management and ownership of assets, building the global impact market, and addressing pressing challenges through scalable impact enterprises. This year’s Honors are presented in partnership with Pioneers Post.

“It is the innovation and drive of leaders such as this year’s winners that bring us closer to a future where impact is the defining element to the business and investment decisions we all make,” said Sir Ronald Cohen, founder and chair of the GSG.

Sir Ronald will present the Honors to the winners alongside Pioneers Post editor Tim West.

“These bold disruptors showcased in this year’s GSG Honors are doing nothing short of putting us back in touch with our own humanity, demonstrating that people and planet can and must sit alongside profit and prosperity as we consider how our actions will impact on future generations,” said West.

      Impact Asset Owner of the Year: Blue Haven Initiative

The U.S.-based family office was among the first created with impact investing as its mission and focus, applying a rigorous portfolio-management lens to for-profit and philanthropic capital with the goal of aligning financial performance and public benefit.

“My wife, Liesel Pritzker Simmons, and I have long known that impact investing is more informed investing. We are excited to see the impact movement grow around the world and look forward to a day when investors everywhere are investing for positive impact,” says Ian Simmons, Co-Founder & Principal.

      Impact Asset Manager of the Year: LeapFrog Investments

Since its founding in 2007, Australia’s LeapFrog Investments has invested capital, people and knowledge in purpose-driven businesses, particularly those in emerging market, helping them to grow, to be profitable and to have real social impact.

Dr. Andy Kuper, Founder and CEO of LeapFrog, said: “LeapFrog is honoured to be named Impact Asset Manager of the Year, recognizing the team’s efforts over the past 12 months, and a decade of building a best-in-class investment institution. We are all lucky to be alive at a moment of a historic financial and social opportunity for business. Looking ahead to the next 10 years, we plan to extend our portfolio companies’ reach from over 100 million to 1 billion emerging consumers, profoundly changing companies, markets and lives. We look forward to continuing to support high growth healthcare and financial services companies to fulfil this ambition, delivering on our original mantra: Profit with Purpose.”

      Impact Entrepreneur of the Year: Dr. Devi Shetty, Narayana Health

India’s Narayana Health is a low-cost hospital network that has created an affordable, globally-benchmarked quality-driven healthcare services model by leveraging economies of scale, skilled doctors, and an efficient business model.

      GSG Honors - Impact Market Builder of the Year: The Impact Management Project

How impact will be measured has long been a pressing question facing the sector. The Impact Management Project is an ambitious initiative to provide coherent and end-to-end ‘rules of the road’ for impact management.

The IMP is a global network of standard-setting organisations, who have come together to accelerate widespread adoption of impact measurement and management. This is the first time that such a diverse group of organisations, from right across the value chain, and covering both public and private markets, have come together to provide coherent and end-to-end ‘rules of the road’ for impact management.

Clara Barby, The Impact Management Project (IMP), said: In financial management, ‘general acceptance’ of norms for how we talk about, measure and manage financial performance enables capital to flow efficiently across value chains and across borders. If we want impact management to become the norm for every enterprise and investor, we need shared principles, reporting standards and benchmarking methods for impact. Building consensus and coordinating efforts through the IMP network is our best shot at creating an impact management approach that can ultimately become generally accepted globally. It is a privilege to coordinate this truly ‘by the market, for the market’ effort – and I accept this award on behalf of everyone who participates.”

GSG Millennial Honors

The GSG Millennial Honors celebrates the next generation of impact leaders, honoring entrepreneurs under 30 who have founded or co-founded scalable enterprises with measurable impact. The year’s Millennial Honors are presented in partnership with the Aspen Network of Development Entrepreneurs (ANDE).

“ANDE is pleased to again be part of this effort to honor small and growing business (SGBs) led by the next generation of innovators. We know that SGBs drive prosperity in developing markets and it’s critical to celebrate entrepreneurs that are leveraging business to achieve the Sustainable Development Goals,” said Randall Kempner, CEO of ANDE.

This year’s winners are Samir Ibrahim, Founder and CEO of SunCulture, and Ankit Agarwal, Co-Founder and CEO of HelpUsGreen.

Sun Culture sells affordable, IoT enabled solar-powered water pumps and micro irrigation systems, bundled with ongoing support and financing to increase smallholder farmer productivity. Their solutions use clean electricity and increase crop yield by up to 300%, support farmer livestock and household needs, and generate up to 10x more income. SunCulture is currently saving 9 billion liters of water annually.

Samir Ibrahim, CEO & co-founder of SunCulture: “I’m deeply honored to receive this award. This award is a reflection of the commitment that each and every person at SunCulture makes to all of our customers, and I feel lucky to do this work with everyone on our team.”

HelpUsGreen preserves the Ganges River by collecting the floral waste from temples that is otherwise dumped in the river and up-cycles it into charcoal-free incense sticks and biodegradable alternate to Styrofoam. This, in turn, provides livelihoods to marginalized women in Uttar Pradesh, India.

“We are deeply humbled by the GSG recognition and opportunity to represent our work, furthering the impact work towards cleaning the Ganges and Sustainable Development Goals”


Meg Massey, GSG Director of Communications

+1 202 827 5712



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How donor supported engagement on enabling environment can help your business grow

Posted By Mark Sevier, Feed the Future Partnering for Innovation, Monday, October 15, 2018

Policies, laws, regulations, and norms — i.e., enabling environment factors — that govern market behavior substantially impact businesses’ viability, scale, and growth trajectory. In emerging markets, enabling environment factors can also affect how businesses ultimately reach consumers who depend on their goods and services to make a basic living. In rural agricultural settings, for example, smallholder farmers (those farming fewer than five acres) are often left out of formal markets and have little access to government programming; they therefore depend on the affordable access that businesses can provide.

Major multilateral development agencies and government donors are increasingly looking at how enabling environment issues can constrain or foster robust markets that benefit the poor, including smallholder farmers. A newly released report from the Feed the Future Enabling Environment for Food Security project examines how the United States Agency for International Development (USAID) can work with host country governments and private sector partners to create more conducive enabling environment conditions for investments that reach smallholder markets.

The report engages companies working in the smallholder farmer markets of Bangladesh, Guatemala, Kenya, Uganda, and Nigeria. Based on conversations with private sector company representatives, the report explores how enabling environment factors positively or negatively affect business growth in terms of reaching smallholder farmers at scale. It provides a sounding board for private sector opinions on how USAID and other development partners can best support private sector investment and help address the policy constraints that threaten to derail these crucial investments.

Access the full report and technical learning note here to learn what your peers are saying and suggested implications for donor engagement and support.

As donors move to help address enabling environment issues that limit conditions for investment and the impact of development programming, private sector actors have a key role to play in shaping the process through having their voices heard and stories engaged. Below are key takeaways from private sector interviewees as well as ways in which donor supported engagement can help your business better engage on enabling environment factors.

Enabling Environment Factor

How a Donor Can Help

Enabling environment issues don’t necessarily factor into whether investors make an investment or not; rather, they shape the details of the final investment.

For example, foreign investors tend to operate through a local partner to shift the risk of regulatory compliance. This can affect local companies who then must manage many systems across multiple jurisdictions, adding additional costs to their own operations. High costs and complicated, unclear forms incentivize businesses to limit operations to one country or to regional markets with similar operating environments.

De-risking grants and/or acceleration services.


Find out if the donor has opportunities to off-set the high cost of capital through operational grants that defray costs. In a constrictive enabling environment, this avenue can give your company the necessary time to reach growth potential in concert with traditional financing. This type of engagement can also open dialogue for your company to educate and inform the donor into best practices for them to support private sector to thrive.

Enabling environment factors influence business decisions to exit markets or cut existing business lines.

Risks due to policy changes, procedural delays, or “unfriendly” business policies can influence businesses to simply stop operating in a given country or region.

Join multi-stakeholder stakeholder forums.

Many funders are heeding advice to draw on their convening power to organize working groups and open opportunities that benefit their intended beneficiaries. Examples abound in sectors such as cocoa, coffee, and palm oil illustrating the power of such groups. Join them and proactively participate in meaningful ways to help effect change.

Enabling environment reforms can benefit from reliable, quality data and evidence.

Business see the donor role in policy reform as providing reliable evidence, and more and more donors are delivering through new initiatives. Donors can help not only by providing evidence but by using their convening power to inform existing or proposed policies.

Engage about your data needs.

Donors publish a high volume of helpful research, data analyses, articles, and policy papers to solve pressing issues identified by the public or private sectors. Engage donors on what types of data would be helpful for your business. Chances are there may already be existing market data on which you can draw to lower your operational and marketing costs.


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FINCA International and USAID PACE Launch FINCA Forward, a Fintech Innovation Platform

Posted By Michael Leen, FINCA International, Thursday, October 4, 2018

Global microfinance pioneer FINCA International, in partnership with USAID, announces the launch of FINCA Forward, a fintech innovation platform. This two-year pilot will facilitate collaboration between early-stage financial technology enterprises and microfinance institutions (MFIs) to help small and growing fintech businesses overcome the pioneer gap and to enable MFIs to better reach underserved and underbanked populations, especially women. Participating fintechs will run proof-of-concepts in close collaboration with MFIs in Africa and Latin America, which will include tailored pre-investment support and the opportunity to access investment capital. For more information, visit


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Tags:  Financial Inclusion  Fintech  innovation  Microfinance  SGBs 

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