The solutions to many of our biggest development challenges are already being built locally. In more than 60 years of supporting small and medium-sized enterprises (SMEs) across the globe, we have seen how they drive innovation, inclusion and employment. They make up nine in ten businesses worldwide and create more than seven in ten new jobs and are increasingly the ones bringing new answers to social and environmental challenges.
Yet too many of them reach a point where their potential to grow exceeds the financing available to them. Today, SMEs in developing economies face an unmet financing need of about USD 5.2 trillion a year, and the gap is widening. The problem is sharpest in the infamous “missing middle”: too large for microfinance, too small and too unconventional for banks and funds, and, above all, not yet visible or prepared enough for the investors who are looking for them.
Closing that gap does more than strengthen individual businesses. It means more jobs, more resilient local economies and faster progress towards the Sustainable Development Goals.
Sources: World Bank; International Finance Corporation (IFC)
For more than 60 years, Swisscontact has walked alongside these SMEs, helping them grow, strengthen and become more competitive. Today, we work across 39 countries, with 95% local staff, and have supported more than 540,000 SMEs and mobilised USD 1.7 billion along the way. This gives us something distinctive to bring to impact investing: deep local knowledge, trusted networks, the experience to mobilise capital and enterprises we already know, combined with a systemic understanding of what allows them to succeed.
Our 3C model combines Capability, preparing SMEs for investment and growth through investment-readiness acceleration; Capital, providing catalytic finance designed around the realities of these businesses; and Connections, linking entrepreneurs to the buyers, peers and follow-on investors that can unlock their next stage of growth.
Together, the three Cs go beyond financing a business: they build the conditions for SMEs to scale sustainably and amplify their impact.
In October, the first pillar of our impact investing initiative goes live in Colombia, with the support of the Swiss State Secretariat for Economic Affairs (SECO), the Embassy of Switzerland in Colombia and a private philanthropic partner.
Our first Investment Readiness Acceleration Programme, part of the Colombia + Competitiva Programme, will support 25 high-potential SMEs through an intensive 12-month journey, strengthening their business models, governance, financial readiness and impact – and preparing them to attract the capital they need to scale. The programme will be delivered in collaboration with EAN University in Bogotá.
Colombia is our starting point, but the ambition is global: to take what works, adapt it to local markets and build a pipeline of investment-ready SMEs across Swisscontact’s network.