Many high-potential businesses struggle to scale—not because they lack promise, but because they are disconnected from the right capital, at the right moment, and from investors who understand their needs.
On September 24, as part of FMO’s Future of Finance 2025 conference, FMO hosted the Market Creation milestone event to discuss the persistent barriers preventing capital from reaching the markets where it is most needed. The gathering brought together around 50 partners collaborating with FMO on market creation initiatives, who heard insights from leaders at the forefront of financial inclusion and entrepreneurship in Africa.
The session began with a recap of FMO’s Market Creation strategy, which is designed to expand the pool of bankable investment opportunities in emerging markets. Whereas Development Finance Institutions (DFIs) often focus on direct investments in established companies or large-scale projects, market creation activities work upstream, addressing the systemic barriers that currently prevent DFIs and other investors from reaching underserved markets. These activities pave the way by enabling capital deployment and expanding entrepreneurs’ access to the right kind of finance needed to scale their businesses.
Currently, too many promising businesses remain unbankable—not due to a lack of potential, but because the necessary supporting conditions are not yet in place. This makes it difficult for investors to step in and help close the SDG financing gap.
The willingness to invest is there, but not the right projects and or supporting conditions.
This challenge was underscored by Natalie den Breugom from the Dutch Ministry of Foreign Affairs, who opened the event: “There’s a huge gap in the investable pipeline. The willingness to invest is there, but not the right projects and or supporting conditions.” She emphasized the importance of intensifying efforts and forming partnerships to build ecosystems that nurture investment-ready businesses.
Michael Jongeneel, CEO of FMO, added: “It’s not a funding gap we face – it’s a deployment gap. We have the capital available, but without functioning markets it cannot flow.” He pointed to successful initiatives, such as Invest for Impact Nepal, as proof of what can be achieved through structured collaboration. He also stressed that market creation is a long-term endeavor—needed not just today, but well beyond 2030.
Jorim Schraven, FMO’s Director of Impact, shared insights gathered from members of FMO's Market Creation Platform Advisory Forum, who had convened earlier to advise on strategic priorities and focus areas. He reiterated the Forum’s emphasis on the importance of trust, agility, and value-chain thinking. Jorim also highlighted the need to attract local capital, support the development of new intermediaries, and align donors around the catalytic use of grants.
The heart of the event was a roundtable discussion moderated by Andrew Shaw, Impact Manager at FMO, featuring four experts with on-the-ground experience in Africa. Their perspectives from Ghana, Ethiopia, and the Democratic Republic of Congo (DRC) offered a candid look at the barriers to that hinder investments in their countries, the innovative solutions emerging locally, and the catalytic role development finance can play.
Hamdiya Ismaila, CEO of Savannah Impact Advisory, discussed the financial barriers facing Ghanaian entrepreneurs. Although SMEs form the backbone of Ghana’s economy, many lack the capacity to attract suitable investment. Traditional bank loans are often costly and ill-suited, while alternative funding sources remain limited.
The role of DFIs cannot be over-emphasized – the money needs to move
To address this gap, Hamdiya launched Ci Gaba—a pioneering fund of funds designed to channel local pension funds into SMEs. Years of regulatory reform now allow Ghanaian pension funds to invest up to 5% of their assets in alternatives, opening new possibilities for domestic investment. However, Hamdiya emphasized that capacity gaps persist: “Pension funds don’t know how to invest in SME’s – we need to continuously build capacity in a hands-on way.” Her team has spent a decade training and working alongside the country’s largest pension funds, building a shared understanding of what it takes to invest pension capital in local SMEs.
Ci Gaba’s first close is expected in Q4 2025, with two international investors providing catalytic capital and FMO supporting the fund manager’s operational capacity. According to Hamdiya, the journey is ongoing—growing domestic capital markets, strengthening intermediaries, and providing technical assistance are all essential to unlocking the millions in African pension funds that could drive local economic development. “The role of DFIs cannot be over-emphasized – the money needs to move,” she concluded.
Bringing in the Ethiopian perspective, Henok Assefa, founder of African Renaissance Ventures, highlighted the sweeping reforms reshaping the country’s economy. Financial reforms are developing rapidly, unleashing a wave of entrepreneurship in sectors like technology, logistics, agriculture and energy. Yet, financing to these sectors has not increased in tandem. Banks demand collateral, DFIs prefer to fund larger projects, and venture capital remains limited.
Henok emphasized the importance of innovative pilots and the need for funding and infrastructure investment to help these new types of businesses grow. He argued that the “distribution economy” – from mobile money to EV battery swapping solutions – requires new financing models to de-risk early adoption.
Scarcity forces African youth to be innovative. If we can scale these models, the impact will go far beyond Africa.
With Africa’s young population and abundant entrepreneurial talent, Henok sees scarcity as a driver of creativity: “Scarcity forces African youth to be innovative. If we can scale these models, the impact will go far beyond Africa.”
Africa has already demonstrated its ability to bypass legacy systems and introduce innovative solutions. However, to fully realize the potential of these distributed business models, access to capital is crucial. As Henok emphasized, “Development finance institutions are still focused on large-scale projects, but genuine transformation happens within small-scale economies. We need partners willing to help us scale these efforts together.” This was Henok’s call to action for the investors and donors in the room.
Patrick Nkongo, Managing Director of FPM in the DRC, highlighted both the progress and the ongoing challenges of advancing financial inclusion in a context marked by persistent conflict and fragility. Fewer than one in five adults in the DRC have access to a bank account, and entrepreneurs face steep hurdles—including high interest rates, stringent collateral requirements, and limited willingness from local banks to finance SMEs.
To address these barriers, FPM focuses on strengthening the capacity of local financial institutions, providing guarantees to encourage more lending and reduce risk for lenders, and delivering technical assistance. Special emphasis is placed on supporting women and youth entrepreneurs, as well as refugees displaced by conflict. “Instead of giving them food, we need to show them how to create markets,” Patrick emphasized.
He stressed that even in times of conflict, risks can be managed and mitigated. The Congolese market has shown resilience, and many displaced individuals are eager for empowerment and opportunity. With support from partners like FMO, FPM is building a resilient and profitable institution. Patrick invited other investors to join, underscoring the vast opportunities in the DRC, which is now the fourth most populous country in Africa.
Market creation requires patient capital. At the same time, we need to deploy capital at speed and have the patience to see the results
Bringing the discussion to a close, Claire Nyambori, Technical Assistance Officer at FMO, highlighted the need to balance patience with urgency: “Market creation requires patient capital. At the same time, we need to deploy capital at speed and have the patience to see the results.” While investments should not be pressured for immediate returns, she emphasized that capital is urgently needed to unlock progress.
The panelists agreed on several common themes:
Local organizations are already driving meaningful change by developing solutions to overcome systemic barriers in their markets. By convening donors, philanthropies, DFIs, investors, and local actors through its Market Creation Platform, FMO is helping to scale these efforts and unlock more bankable opportunities.