Conversations from the inaugural summit
Key takeaways
- Catalytic capital is an essential tool to close capital gaps and enable the flow of funds, especially to SMEs to support enterprise growth and wider sustainable development.
- Catalytic capital must be the fulcrum in addressing systemic barriers that will move and make markets more efficient, competitive, resilient and have direct impact on scaling up businesses.
- The capital is available, but the key question lies in how to liaise with catalytic investors and impact capital investors to help unlock these funds that are not being deployed in an efficient manner.
- Catalytic capital seeks strong governance structures or vehicles that can receive that capital and be able to channel it to those transactions that are looking for impact to be made.
- There are desperate needs to be met across almost all sectors of Africa’s social and economic spaces through visionary leadership, good governance and finances that can make an impact, in the form of catalytic capital.
- There are desperate needs to be met across almost all sectors of Africa’s social and economic spaces through visionary leadership, good governance and finances that can make an impact, in the form of catalytic capital.
- There is the need to increase the supply of adequate and suitable agribusiness financing which is long-term, has lower interest rates than the industry interest rates, allows disbursements to be made when the agribusiness needs funds, and delays repayments to enable the business recycle the funds and make profits.
- Mindsets are shifting as the right conversations are being held about how to mobilise domestic capital to solve financing problems.
Challenges
- Lack of access to startup capital and growth capital faced by SMEs in Africa, which hinders socio-economic growth and development.
- SMEs undergo training programmes, business incubation, acceleration programmes and develop strategic plans, but are unable to execute the plans and build the traction that investors require due to the absence of risk takers who can invest in them.
- Language is a barrier for the involvement of French-speaking African countries in issues around impact investing, since essential documents are only available in English. A key example is the Handbook for Establishing National Advisory Boards.
- SMEs lack sound financial and human resources management to harness the potential of impact investment and design sound projects that will attract the interest of capitalists.
