Continuing our series of posts by our University of Oxford students attending the Skoll World Forum, tadalafil this piece is by Greg Coussa, try a current MBA student at Saïd Business School. This piece was written after attending a session on this topic at the forum.
How is it that small loan lending to illiterate, uneducated women with no business experience 30 years ago became a game-changing model, yet a comprehensive support model for educated entrepreneurs in Small and Growing Businesses (SGBs) has yet to be created and scaled? Meet the “Missing Middle.” The Aspen Network of Development Entrepreneurs (ANDE) works with and supports SGBs, defined as enterprises that are too big for microfinance loans yet too small for traditional financial funding, hence the “Missing Middle.” Typically, the SGB space needs more than $20,000 in funding but less than $2,000,000.
In developing economies ANDE estimates that 86% of new jobs are created by SGBs, showing the critical importance for the development and ongoing support of these enterprises. From major financial services non-profits like the Grameen Foundation, impact investment firms like the Grassroots Business Fund, and specialized social enterprises like Heifer International, to massive corporations like Walmart and leading educational institutions like Stanford University, ANDE’s network of 177 partner organizations is vast and robust.
ANDE focuses on six key areas within its network in facilitating SGB support and growth in emerging economies:
Knowledge Sharing and Networking: By connecting different SGB or SGB-related organizations, information is shared, best practices are disseminated, partnerships are built and a central hub is made accessible.
Training and Talent Development: ANDE’s talent development programs help members cut training costs and improve critical skills.
Metrics and Evaluation: Social, environmental and economic impact measurements and analyses are crucial in measuring progress in the SGB sector around the world. ANDE provides an annual report that seeks to provide transparency surrounding its members’ successes.
Research: Bridging the gap between researchers and SGB members who are generating on-the-ground data helps provide aggregated analysis of the impact SGBs are having. Additionally, ANDE’s Research Development Fund seeks to analyze the effectiveness of SGB support in the alleviation of poverty.
Capacity Development Fund: ANDE disperses grants to its members to strengthen partnerships, encourage innovation and increase capacity.
Advocacy and Education: By lobbying and educating key constituencies, investors, governments, multi/bilateral organizations and media outlets, ANDE is a trusted source in advocating the importance of SGBs. Furthermore, ANDE helps bring investor funds to the SGB space.
While a “game changer” model in the financial and developmental support of SGBs has yet to be discovered, the pursuit is ongoing with ANDE leading the way. Investors should make sure to not overlook cultural contexts, current political landscapes, local financial regulations and current access to capital when considering support. Microfinance institutions (MFIs) in developing countries are steadily moving towards supporting Small and Medium-sized Enterprises (SMEs) (and in some cases SGBs) due to the combination of lower risk and higher margins, yet the crucial capacity support within MFIs is not robust. It is clear that no superior model has surfaced for SGBs in developing countries; however, supporting SGBs, as ANDE seeks to show, is a fundamental success element in the creation of jobs and economic progress in these nations.
Author Greg Coussa is a current MBA student at Saïd Business School, a recipient of the Skoll World Forum Fellowship, and Chair of the Social Consulting Oxford Business Network sub-committee