The Missing Asset Class: How Aggregated MSMEs Could Unlock the Next Wave of Impact Investing Deal Flow
Despite years of emphasizing the need to reach underserved businesses, the impact investing sector is increasingly focusing on lower-risk opportunities. According to Adanna Chukwuma at CARE, mature companies have drawn the largest increases in impact assets over the past six years, while funding to seed-stage enterprises has contracted — despite multiple financial instruments designed to serve the micro, small and medium enterprises (MSMEs) in this segment. As she explains, this trend excludes a vast band of businesses with real revenue, real demand and real growth potential: aggregated MSMEs, i.e., individual enterprises that have joined together to contract and borrow as one. She explores the investment opportunity in these MSMEs, and calls for the creation of a new asset class around them, explaining how this could unlock the flow of impact capital to enterprises that remain systemically overlooked.
