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SME financing
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Risk capital creates growth opportunities for SMEs
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SMEs are an important driver of the local economy in developing countries and emerging markets. Access to risk capital is key if these businesses are to finance their growth and create new jobs.
Access to long-term capital an obstacle for SMEs
Flourishing SMEs make a key contribution to sustainable economic development. They play an important role in the value chain of multinational companies, both as suppliers and as a means of penetrating new customer segments. Because SMEs operate in clearly defined niche markets, they also have considerable potential for innovation.
However, for SMEs access to risk capital is often an obstacle for SMEs, hampering further growth and development. They depend on long-term financing to be able to continue growing and gain access to different markets. Specialist private equity funds are a way of bridging this gap. Fund managers can also assist SMEs when it comes to adapting their business practices to international standards.
SMEs add social value
As part of the fabric of local society, SMEs make a direct contribution to alleviating poverty. They create jobs, especially for less qualified people, offer products adapted to local needs, and thanks to their flexibility they are reliable partners in any situation. Last but not least, expanding SMEs are also an important source of tax revenue.
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SMES: the missing middle
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Why invest in SMEs?
Investments in SMEs can potentially generate double bottom line returns. Firstly, SMEs are an interesting financial investment focused on the emerging markets and are also attractive for diversification reasons. Secondly, they are a means of harnessing the potential that exists at the base of the pyramid and thus making a direct contribution to development.
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