Lundin Foundation

Lundin Foundation

Resourcing the 'Missing Middle'

While there is significant inter-country variation, Africa’s private sector consists primarily of a large number of informal microenterprises operating alongside a handful of large firms. Small and medium enterprises (SMEs) have historically been few and weak in Africa due to a range of factors including, but not limited to: poor infrastructure, small local markets and underdeveloped regional integration, weak business legal and regulatory environments, low business acumen and limited access to financing.

Limited access to financing is a critically unmet need. While microfinance has demonstrated convincingly that access to capital at the household level can help lift households out of poverty, it has been less successful in catalysing benefits beyond immediate family or laddering enterprises into the formal, tax-paying economy.

Meanwhile, both large commercial banks and private equity funds have historically avoided the SME space due to well-founded concerns about credit quality, transaction costs, and the absence of collateralized deal structures As a consequence, growth opportunities for SMEs (the so-called Missing Middle) and, by association, Africa remain constrained by lack of finance and accompanying technical / management assistance. As the chart below illustrates, investments between $50k and $2mn comprise what is what is now commonly referred to as the Missing Middle.

The Foundation makes the following investments to address these needs:

  • Impact Investments support scalable SMEs and social enterprises ($250k-$2M)
  • Accelerator Grants ($50-$250k) enable early stage businesses and innovations to validate concepts and refine business models.

Investment Criteria

Investment opportunities are assessed against the following selection criteria:

  1. Financial sustainability – a capital structure that incentivizes management; vetted assumptions and projections; a clear pathway to profitability;
  2. Business model – a strong and innovative business model that reflects a nuanced understanding of the market need and opportunity, competitive landscape, key challenges, and relevance for BOP consumers and producers;
  3. Impact – businesses that generate a measurable social and/or environmental return including: growth in top line revenue, jobs, wages paid, taxes, growth in smallholder income through supplying or distributing products, and expanded rural access to products and services;
  4. Scalability – products or services capable of achieving significant scale;
  5. Management team – the character, capacity, and track record of management to execute and deliver results.


Vancouver, BC, Canada
Agribusiness, Financial services, Renewable energy, Waste management and recycling
Accra, Ghana
Gaborone, Botswana
Nairobi, Kenya
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