Small and Growing Business (SGB) Portfolio
June 2024
$6.0M
Capital Outstanding
8
Active Clients
34
Active Loans
5
Countries Reached
SGBs often lack access to sufficient, appropriately structured growth capital, despite their importance in driving job creation and entrepreneurial activity in emerging markets. When SGBs in the informal economy are considered, the total credit gap is estimated between $2.1 - $2.6 trillion.
MCE’s Small and Growing Business (SGB) Portfolio addresses this market gap by serving SGBs in the “missing middle”—those that are too big for microfinance, yet too small for commercial lending. With a focus on investing in women and the environment, our SGB portfolio provides catalytic and flexible debt capital to SGBs in the agriculture, water and sanitation, and clean energy sectors. Our portfolio companies create economic opportunities in rural economies, raise small-holder farmers’ incomes, and facilitate access to basic needs in underserved areas.
MCE is committed to ongoing partnership with these enterprises as they grow and scale to better serve their customers, their employees, and their communities, generating sustainable and inclusive economic growth that supports a thriving environment.
As of June 30, 2024, our SGB portfolio consisted of $6.0 million outstanding in 8 SGBs operating across 5 countries.
Why Small and Growing Businesses? »
SGBs often lack access to sufficient, appropriately structured growth capital. When informal SGBs are taken into account, the total credit gap is estimated between $2.1 - $2.6 trillion. This gap is even more pronounced for women-owned SGBs, 70% of which are unserved or underserved, which represents an additional $285 billion credit gap according to the World Bank Group.
The purpose of our SGB portfolio is to address some of the critical market gaps that exist by providing catalytic loans to support SGBs in the “missing middle” (that are too big for microfinance, yet too small for commercial lending)—businesses that otherwise lack access to financing on affordable and appropriate terms.
The SGBs in our portfolio are often the only sources of formal employment in the areas in which they operate. By financing and supporting their growth, we are able to create economic opportunities and impact the lives of people living in particularly marginalized communities through the agriculture value chain, renewable energy, and water and sanitation sectors.
SGB Investment Spotlights
For a full list of the SGBs in our portfolio, please visit our Portfolio List page.
Good Nature Agro (GNA) invests in Zambian small-scale farmers to generate lasting income by providing technical assistance, inputs and access to a readymade market. The result has been a two-fold increase in productivity for thousands of farmers.
Azahar is a Colombian small business involved in the sourcing and exporting of premium specialty coffee from 5,000 small-scale farmers in post-conflict areas. Its uniquely impactful approach comes from traceability initiatives like its Sustainable Coffee Buyers Guide, which helps buyers understand price point to income ratios based on region.
Sol Organica is a certified B-Corporation in Nicaragua that works to improve the livelihoods of tropical fruit farmers in Nicaragua while maximizing their agricultural potential and promoting the use of sustainable and organic farming practices.
SGB Portfolio Growth
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SGB Portfolio Diversification
Geographic Diversification
Sector Diversification
*Sector diversification data as of Q4 2023, updated on an annual basis.
SGB Investment Criteria
investment strategy
Sector: Agriculture value chain
Geographic focus: Africa and Latin America
Company Profile
> 2 years of operations
Proven business model
Sustainable and scalable sources of revenue >$1M/year and positive EBITDA (within 12 months of investment)
Positive equity with reasonable debt-to-equity and debt service coverage ratios
Audited financial statements for at least one year and quarterly financial statements
Key Impact Criteria
MCE requires Small and Growing Businesses to have social and environmental protection systems in place and prioritizes investments that meet the following criteria:
Livelihoods: Generates local quality jobs and enhances income opportunities in rural areas. Works with smallholder farmers and, preferably, provides support to boost agricultural yields and price premiums.
Women: Presents a gender-balanced workforce and supply chain. Proactively enhances employment and income opportunities for women. Preference for women-founded or women-led companies.
Climate: Adopts sustainable agriculture practices through organic, regenerative and other techniques, and/or supports smallholder farmers in adopting them through Technical Assistance. Preference for strong climate adaptation practices.
SGB Deal Structure
DEal Structure
Size: US$300K - $1.5M
Currency: USD, EUR, or local currency
Pricing: 9 - 12% in USD
Term: 12 months - 4 years
Product: Senior working capital
SGB Impact
Portfolio List
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