Policy Papers

Unlocking High-Growth Potential: The Case for Redirecting Capital to the Missing Middle explores how millions of young entrepreneurs are being held back by a persistent gap in access to appropriate finance.

This paper makes the case that investing in early-growth, “missing middle” businesses is one of the most effective ways to drive sustainable economic growth and job creation. It outlines practical actions for donors, financial institutions, and policymakers to redesign capital, better identify high-potential enterprises, and ensure underserved entrepreneurs can access the support they need to scale.

Key priorities highlighted in the paper include:

• Redesigning capital to better meet the needs of early-growth businesses, including more flexible, patient, and appropriately sized financing, as well as blended finance approaches that reduce risk and crowd in private investment
• Pairing finance with investment readiness support, such as mentoring, training, and market access, to ensure entrepreneurs can effectively deploy capital and achieve sustainable growth
• Intentionally targeting underserved entrepreneurs, including women, youth, refugees, and rural founders, by adapting investment criteria and working with local partners to reach high-potential businesses often overlooked by traditional finance