About DGGF Financing local SMEs

Local businesses find it difficult to get the financing they need. This means it is difficult to grow. This group is called the missing middle. These businesses have outgrown microfinancing but do not yet have access to regular financial services.

DGGF wants to expand financing opportunities for this so-called missing middle. Not by investing directly in local SMEs, this is much too difficult. To increase local SMEs’ access to finance, the DGGF invests in funds which in turn invest in businesses in the DGGF countries. The DGGF enlarges its impact by investing in intermediary funds that are better placed to reach local SMEs.

This part of the DGGF is a 'fund of funds': it is building up a portfolio of intermediary funds that are catalysts for local economic growth. Greater access to finance enables local SMEs to grow and strengthens the financial sector in low- and middle-income countries. The DGGF has set specific targets for intermediary funds that invest in young or female entrepreneurs and entrepreneurs in fragile states. 

Inclusive Growth Strategy

By ensuring economic growth is fairly distributed across society, inclusive growth supports the objective of creating opportunities for all. DGGFs objective has always been to support youth and women entrepreneurs, and SMEs in fragile states. Since 2020, the focus of DGGF on inclusive growth has been better defined, targeted and integrated through sharpening of the definition along four dimensions, renewing the Theory of Change and integrating inclusive growth materialisation. Moreover, a new target has been added and ex-ante investment are measurement against their potential to contribute to inclusive growth. Read more about the why, how and to what extent DGGF contributes to Inclusive growth here.

Inclusive growth is an important strategic priority for DGGF Financing local SMEs. Achieved through collaboration with local partners willing to take measured risks and provide inventive services in the least served areas, catering to the entrepreneurs who are frequently unnoticed. Watch this video as an example of partners and entrepreneurs.

The four inclusive growth dimensions of DGGF – Financing local SMEs

Inclusive growth dimension


Inclusive finance

Increasing access to finance for youth and women entrepreneurs and entrepreneurs in fragile states

Inclusive employment

Increasing access to decent jobs for women and youth, low-skilled workers, and marginalised groups

Inclusive products and services

Increasing access to products and services tailored to the Bottom of the Pyramid and marginalised groups

Inclusive outreach

Promoting business operations and accessibility of products in semi-urban and rural areas

Gender Lens Strategy

DGGF is committed to improving the financial ecosystem for missing-middle SMEs operating in frontier markets. Increasing the access to finance to female entrepreneurs is a strategic priority. DGGF deploys a broad range of instruments. Read more about the Gender Lens Strategy.

DGGF Impact Newsletter

The DGGF Impact Newsletter updates you on the expected performance of the total portfolio, portfolio highlights and DGGF in action. This edition is focused on DGGF’s key target groups: fragile states, youth and women entrepreneurs.

Check out the Impact Newsletters here