Why Catalytic Capital Matters Now

Catalytic capital is “the means by which rural African entrepreneurs, often operating in fragmented markets and overlooked by conventional investors, can become more resilient,” writes Small Foundation’s Karina Wong, in ImpactAlpha.

“Many constraints in rural small business finance stem from mindset barriers: assumptions that rural markets are ‘too risky,’ that smaller deals aren’t worth the transaction effort, or that unfamiliar business models are inherently fragile. These are often automatic mental shortcuts that shape investor behavior as powerfully as financial analysis,” she says. “This matters for catalytic capital because mindset barriers won’t be solved by more spreadsheets or better data alone – they require demonstration.”

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