Missing Middle Initiative
Missing Middle Initiative Launched at the World Economic Forum in Davos, Jan 2010The Missing Middle Initiative was launched at the World Economic Forum in Davos, January 2010, part of the Young Global Leader´s Global Redesign Initiative. Below is an introduction to the Missing Middle Initiative and attached at the bottom is the presentation and proposal that were presented.
Issue:The “Missing Middle” refers to the gap in capital in emerging markets, which is larger than microfinance and smaller than traditional institutional financing. In the developed world, this segment of capital exists and supports small-medium sized enterprises (SMEs), but in developing economies it is largely absent, creating a financing hurdle for establishing a robust SME base. The issue of the Missing Middle extends beyond just a lack of capital; and includes the lack of support, infrastructure and overlaying networks of intermediaries, institutions, and investors.
Opportunity:The Missing Middle presents a unique opportunity for emerging market investors to achieve both competitive financial returns and significant social impact, addressing some of the largest income and wealth gaps faced by developing countries and communities around the world. Closing this funding gap is the next stage of capital development after microfinance, completing the financing food chain throughout a business’s life. While microfinance typically does not scale beyond local markets nor aimed at job creation outside an immediate group, small-medium sized capital targets larger and more sustainable economic and social growth opportunities.
Mission:The purpose of the Missing Middle Initiative is to put a spotlight on the gap in capital in emerging markets, accelerate the momentum of SME Venture Funds, and showcase best practices of fund structures, intermediaries and institutions. At the center of the initiative is an investment philosophy focused on investing in emerging markets and industry sectors that are ready for capital, not just in need, supporting a trade vs. aid strategy and taking a no compromise approach on financial returns and social impact.
The team leading the initiative includes:
- J. Skyler Fernandes – COO of The South African Chamber of Commerce in America and venture capitalist at Centripetal Capital Partners
- Euvin Naidoo – The South African Chamber of Commerce in America
- James Wanjohi – Managing Director; The Branson School of Entrepreneurship
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