chapter  5
16 Pages

Bridging the pioneer gap

Financing the missing middle
ByNicolas Chevrollier, Myrtille Danse

Inclusive innovation is the market-driven development of something new with impact together with low-income groups. Offering significant market opportunities, inclusive innovations are developed by increasing numbers of companies worldwide. However, it is becoming clear that there is still a financing “missing middle” between microfinance and the regular financial instruments available to support companies developing products and services for the low-income groups. This missing middle is particularly predominant in financing BoP ventures in the early stages of development. This chapter explores the nature of the capital needed; the challenges for companies to obtain it; and the emerging financial instruments offered by public authorities, corporate and impact investors to fill this financial missing middle.