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Enabling entrepreneurship in frontier markets

Small and medium-sized enterprises (SMEs) are crucial drivers of economic growth and job creation around the globe. Especially in frontier markets, SMEs have the potential to promote job creation, innovation and inclusive economic growth. Unfortunately, SMEs in these frontier markets often lack access to tailored financial products and services to expand their business. This results in a large group of entrepreneurs whose financing needs are served neither by microfinance nor by conventional capital market players, the so-called missing middle’. The global SME funding gap is even estimated to be around USD 5 trillion. To increase the potential of SMEs in frontier markets as well as in The Netherlands, the Dutch Ministry of Foreign Affairs has launched the Dutch Good Growth Fund (DGGF) in 2014. The DGGF consists of three parts, one of these - ‘DGGF Financing Local SMEs – is managed by a consortium consisting of Triple Jump B.V. and PwC

Mrs. Viviane Assogba in front of her shop, offering juices and health products. Viviane has received support from Innov’Up, a DGGF investee and accelerator providing capacity building and training for female entrepreneurs in Togo.

DGGF’s approach to enabling entrepreneurship in frontier markets

The DGGF provides finance in 70 countries across the world and aims to reach out to underserved markets, foster innovative financing products and invest in specific target groups, among which young and female entrepreneurs and entrepreneurs in fragile states that face high barriers to attracting capital. ‘DGGF Financing Local SMEs’ increases financing opportunities for SMEs in frontier markets through investing in financial intermediaries. In doing so, DGGF helps SMEs to grow their businesses and create jobs and additional produc­tion capacity. A unique ecosystem approach is used to cover the specific needs of the ‘missing middle’ SMEs, ranging from first-time entrepreneurs to established businesses. In short, the activities of ‘DGGF Financing Local SMEs’ include:


Contribute to new and existing investment initiatives for SMEs

  • Partnerships with local fund managers and financial institutions allow for setting up new initiatives that provide tailored financing and support to SMEs.
  • The fund provides seed capital to high-risk, early-stage SME initiatives that pilot a new financial instrument or test a new product-market combination.

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Capacity building of financial intermediaries and SMEs

  • The fund finances business support to SMEs to acquire specialised operational and financial know-how.
  • The fund supports, together with PwC, financial intermediaries to strengthen their operations and to bring their tax standards, Environmental, Social and Governance (ESG) standards and impact measurement practices in line with international best practice.

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Stimulate an improved ecosystem for the missing middle

  • The fund builds knowledge through studies, workshops and conferences, and supports local incubation and acceleration initiatives, which help starting entrepreneurs develop sound business plans and entrepreneurial skills. 

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“Business opportunities created by local entrepreneurs provide an untapped potential for inclusive economic development and are key in the transformation of these countries towards more prosperous societies. DGGF helps in realizing these opportunities.”

Saskia Jongma,Deputy Director Sustainable Economic Development Department at the Ministry of Foreign Affairs

PwC is responsible for the 'turn-key' implementation of the DGGF-programme

PwC has built a substantial track record in the implementation of government commissioned funds for development cooperation (such as ORET (2007-2019), FLOW (2012-2016) and SBOS (2010-2016). Between 2014 and 2024 (with a possible extension to 2029), we are responsible for the 'turn-key' implementation of the DGGF ‘Financing local SMEs’ with a mandate of the Dutch Ministry of Foreign Affairs. To date, we have built a diverse portfolio of intermediary funds that approaches our investment budget of € 327,5 million.

DGGF’s impact on local SMEs in frontier markets

In five years’ time (2014-2019), DGGF ‘Financing local SMEs’ has been able to create a positive impact in more than 50 countries worldwide by, amongst others, supporting more than 33,000 jobs and financing more than 4,500 SMEs through its support to local finance providers.

DGGF is a frontrunner when it comes to investing in fragile markets, where there are relatively few international investors. As a 'first mover', the fund is a catalyst for investing in frontier markets and increases its impact by convincing others to join. Additionally, PwC has set a standard for investment funds within the DGGF portfolio as well as others by training a large number of fund managers in developing their tax policies, Environmental, Social and Governance (ESG) policies and frameworks and result measurement methodologies. PwC is continuously helping investment funds to reach their full potential with ESG and impact management.

“One of the unique characteristics of the fund is that it allows us, besides making impactful investments, to support intermediary funds in reaching the next level by improving their governance, result measurement and ESG” says Lennart Konijnenberg, Consulting Director of PwC and team lead DGGF. “For example, we have integrated the Sustainable Development Goals (SDGs) in the result measurement cycles of intermediary funds. This ensures the alignment of DGGF investments with the SDGs and allows intermediary funds to become better equipped for the future.”

A concrete example of DGGF’s impact on the ground is the success story of two young passionate designers in Caïro, Hend Riad (28) and Mariam Hazem (28). The two designers have received finance from Sawari Ventures North Africa Fund, one of the investees of the Dutch Good Growth Fund (DGGF). Thanks to the received support, the designers managed to professionalize their business “Reform Studio”, which transforms used plastic into designer products. In October 2016, their business received a major boost when asked to contribute to the launch of IKEA’s first African-themed furniture collection.

Are you interested to know more about how DGGF’s unique approach is creating impact for local entrepreneurs like Hend and Mariam? In our impact report 'Five years of enabling entrepreneurship in frontier markets', you can read various inspiring case stories of entrepreneurs that were able to succeed thanks to the support of DGGF. 

Contact us

Anton Koonstra

Anton Koonstra

Partner, Industry Leader Consulting Public Sector, PwC Netherlands

Tel: +31 (0)65 150 10 46

Lennart Konijnenberg

Lennart Konijnenberg

Director, PwC Netherlands

Tel: +31 (0)61 291 77 03

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