Micro, Small and Medium Enterprises (MSMEs) are the lifeblood of the global economy, accounting for roughly 90% of business entities and generating more than half of the world’s employment.1 The contribution of formal SMEs in emerging and frontier markets is even more foundational, driving nearly 40% of GDP and 70% of new job creation.
And yet, across emerging and frontier markets, more than 130 million MSMEs face onerous constraints in accessing finance, leading to unmet growth potential and unfulfilled aspirations. According to the IFC, the estimated financing gap is 4.8 trillion, with women-owned businesses constituting one-third of this total.2
While there are more than 750 formal financial service providers dedicated to servicing the vast financing needs of MSMEs in our markets, DAI Asset Management pursues a disciplined strategy to identify and invest in the most responsible Microfinance and SME Finance Institutions globally.3
In practice, our search for responsible Microfinance and SME Finance Institutions means that we not only screen for financial stability and risk management, but also for quality management teams, sound corporate governance, a company culture that values equality, fairness and transparency, and a demonstrated ethical commitment to the customers the institution serves and the communities in which it operates.
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When we find financial institutions that meet our rigorous standards, we invest debt capital that enables these institutions to expand their loan books and drive financial inclusion. Our portfolio companies have positively impacted the lives of tens of millions of people by providing loans to MSMEs — and more than half of our portfolio companies’ loans are extended to female borrowers.
But our impact doesn’t stop there.
By scaling sound financial institutions that operate with integrity, DAI Asset Management is helping to build sustainable, local platforms that can advance financial inclusion over the long term.
How One Woman Overcame Early Life Challenges to Build a Longan Trading Business
Supporting Entrepreneurship & Community Development in Cambodia
From Part-time Driver to Owner of a 15-vehicle Taxi Fleet
[1] World Bank. https://www.worldbank.org/en/topic/smefinance
[2] IFC, MSME Finance Gap 2017, updated in 2018/19
[3] MIX, Global Outreach & Financial Performance Benchmark Report — 2017-2018.