Countries with robust communities of SGBs have better development prospects than those without. When the SGBs succeed, they create jobs and provide solutions to social challenges. Yet it is rare for a poor country to have a strong SGB community. Weak systems— from education, to transportation, to financial policy—all make it more difficult to start, run, and grow a business. Development finance institutions and donor agencies are uniquely positioned to build the entrepreneurial ecosystems that SGBs need to thrive.

BY HELPING THEM, DFIs AND DONOR AGENCIES BUILD:

A STRONGER MIDDLE CLASS. A healthy SGB sector leads to more jobs, more employee buying power, and stronger professional skills. As companies grow, so do job opportunities.

IMPROVED BASIC SERVICES. Many poor countries have difficulty providing access to high-quality education, healthcare, and utilities, among other basic services. This challenge presents a market opportunity for SGBs operating in these sectors.

A DYNAMIC BUSINESS ENVIRONMENT. As businesses grow, they become buyers of the supplies and services they need to operate. In this way, one SGB supports others in the community. This multiplier effect encourages entrepreneurship and creates an environment of innovation.


WANT TO HELP SMALL AND GROWING BUSINESSES IN EMERGING MARKETS?

Donor agencies and development finance institutions can:

  • Invest in businesses with the potential for high impact, but that are deemed too risky by local investors.

  • Provide support for capacity development.

  • Support initiatives that contribute to an ecosystem for small businesses.

  • Scale proven models.

 

The following examples show how some of ANDE’s development member agencies are already working to build SGB ecosystems:

USAID Unlocks SGB Investment > 

DFID Focuses on Social Businesses
for the Underserved >

The MIF Supports SGBs for Regional Development >