Tiny startups in developing countries have a savior in microfinancing organizations like Kiva, but what about the small- to medium-sized businesses that don't qualify for microloans? These businesses, commonly called "the missing middle," have between 10 and 300 employees and usually seek between $20,000 and $2 million. They are the backbone of economic growth in developing nations, but are tragically undersupported.
That's where the two-year-old Aspen Network of Development Entrepreneurs (ANDE), the Aspen Institute's global network of 115 organizations--including the Gates Foundation, the Acumen Fund, and the Skoll Foundation--comes in. Members of the network provide both capital and training to the missing middle in countries like India, Kenya, Colombia, and Brazil. And according ANDE's just-released annual impact report this week, the network's members are doing some excellent work.
The stats: Over the past year, ANDE has grown by 37 members and expanded into 18 new countries. In total, ANDE members now manage 63 funds devoted to small and growing businesses, and have invested over $900 million in 2,500 companies. Through capacity building and direct equity or debt investment, ANDE members have supported over 11,100 businesses.
So who's getting all this money? Our favorites include Ecotact, a startup that installs pay-per-use toilets and showers in Kenya to improve local sanitation; Nandan Biomatrix, which provides energy and income to Indians by cultivating jatropha plants for use as biofuel; and TechnoServe, a company that trains farmers in war-torn Mozambique to produce high-quality cashews.
There are still hurdles for ANDE to overcome in the small and growing business space. "We need to drive greater quality and consistency in measuring the impact of small and growing businesses. Getting data so we know their social and environmental impact is important," explains Randall Kempner, Executive Director of ANDE. These businesses also need mentorship and help building out their management teams before they can become attractive investment prospects.
But ANDE is set to grow quickly--the organization is currently adding one new member a week. "The macroindicators are pretty good that there will be continuing resources flowing into this space," says Kempner.