Enterprises of the least developed countries (hereinafter, LDCs) are the “left behind” in the outbreak crises due to the COVID-19 pandemic. They have been receiving foreign aid and financial support that could not be ensured any longer due to national and global lockdowns coupled with the cutting aid budgets.
Financial aid was fundamental for the entrepreneurs to build their business, to access new markets and grow. It also served for ensuring a higher level of employment within the LDCs, both for women and youth.
The private sector seems likely to fund and support LDCs. Indeed, the SDG500 are already supporting small businesses in LDCs to remain afloat.
A blended finance could fill this financial gap. There are diverse ways of supporting SMEs in the LDCs through the blended finance. One of the most relevant would be the long-term significant investment, implying safeguards against financial risks. These safeguards can also attract interest from investors leading the SMEs to an economic virtuous circle.
An example is the ABC Fund which aims to mobilize €200 million from public and private investors.
More information available at the following page.
Source: World Economic Forum
