How Can Catalytic Capital Unlock Growth for African SMEs?

Small and medium-sized enterprises (SMEs) are among the strongest drivers of economic growth across Africa. They create jobs, foster innovation, and contribute significantly to local economic development. Despite their importance, many SMEs continue to face major challenges in accessing the financing needed to scale their businesses.

Catalytic capital has emerged as a powerful solution to bridge this financing gap. By accepting higher levels of risk or more flexible financial returns, catalytic capital helps mobilize additional investment and supports high-impact businesses throughout their growth journey.

Co-published with Émilie Debled (All for Impact), this international study brought together more than 1,000 registered participants and 400 live attendees. It explores the key challenges limiting access to finance for African SMEs while identifying practical solutions to strengthen the impact investment ecosystem across Francophone Africa.

The study focuses on several key topics, including:

• the main barriers preventing SMEs from accessing finance;
• the role of impact investors and development finance institutions;
• strategies for attracting more private capital;
• partnerships between public, private, and philanthropic stakeholders;
• recommendations for accelerating impact-driven financing.

The findings highlight that stronger collaboration between investors, entrepreneurs, public institutions, and development partners is essential to building a more inclusive and resilient financing ecosystem. Rather than replacing traditional investment, catalytic capital serves as a catalyst that reduces investment risk and encourages additional sources of private funding.

Through this publication, the authors provide practical recommendations to expand impact finance across Francophone Africa and create a more supportive environment for SMEs. By strengthening cooperation among ecosystem stakeholders, catalytic capital can help unlock sustainable growth, create quality jobs, and contribute to long-term inclusive economic development.