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//Venture capital with a difference: targeting Africa’s ‘missing middle’

Venture capital with a difference: targeting Africa’s ‘missing middle’

By | 2018-10-09T19:24:30+00:00 October 9th, 2018|News|

Benjamin Fox/ Euractiv

The ‘missing middle’ of the financial services spectrum in much of sub-Saharan Africa means that start-ups are unable to find the investment they need to grow. That may be about to change with the arrival of more venture capital funds that target low-income mass market.

In a 2015 poll by research analysts Intellecap, 68% of business leaders in Kenya, the main business hub in East Africa, said access to finance is a challenge. 40% said they were forced to self-finance their business.

Prohibitively high bank interest rates and limited liquidity are well-known bottlenecks to business lending, but it is not just traditional bank lending that is difficult to access. Few of the venture capital funds currently investing in sub-Saharan Africa focus on early-stage companies and provide finance of less than $500,000.

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