+91 9871772386
admin@givfunds.com

Blog

Plugging the Pioneer Gap: Lending to Thousands of Social Enterprises

In the previous article, we explored the pioneer gap and why many of the current funding options are not suitable for most social entrepreneurs stuck in the pioneer gap. This constitutes a whopping 70-90% of social entrepreneurs! In this article, we will explore some of the parties that we are aware of who are providing capital in this gap, and why we believe our solution is something that is missing. (hint: it is because none solves the problem at scale)

 

There are numerous organisations providing a variety of grants, convertible debt, equity, and other forms of investments within this gap as well. Some of those organisations include:

  1. Money lenders

Some of such lenders consider themselves social enterprises, and for good reason. In a later article, we will breakdown the rates of these money lenders so you can see that for them, they have already cut costs and their profits to help these social enterprises.

2. Impact investors

Some impact investors average ticket sizes go down to $50,000. Examples include ANGIN, ARUN, Kinara Indonesia, Mercy Corps. Others who go as low as $100,000 are Accion Venture Lab, Anthem Asia, East Ventures, Omidyar Network and Phitrust Asia.

3. Foundations

Certain foundations in Asia focus on providing capital to the missing middle. However, many of these foundations often do not have the capacity to support many social enterprises.

4. Accelerator/Incubator Programs

In a study done by Village Capital and ANDE, 54% of accelerators and incubators provide some form of capital to their social enterprises. In such cases, these funds fall within the pioneer gap. Unfortunately, they are usually one-off and don’t provide subsequent rounds of capital to grow the business. Additionally, the majority of social enterprises do not have the privilege of working with such programs.

 

These organisations are doing incredible work and go a long way in developing the ecosystem and supporting social entrepreneurs at these levels – both in terms of knowledge and capital. However, if we look at the industry from a macro perspective, what this leaves is the top 5-20% of social enterprises within the pioneer gap gaining some form of support, with 5-10% of them gaining monetary support.

 

We recognised that a gap exists to provide capital for the majority of social enterprises within this gap, most of whom have impactful and financially sustainable operations. Our solution to this is our attempt to provide capital to thousands of social enterprises. This way, we hope to be able to move the needle in supporting social enterprises within the pioneer gap.

 

Who’s Bridging the “Missing Middle” in Social Investment in Southeast Asia?

Post a comment