Why are we needed?
Developing nations are characterised by sparse economic activity. The consequence is often strained family incomes and impoverished communities. In many instances:
o One or both parents emigrate to find work elsewhere.
o Children are left with little access to education & healthcare.
o Youth unemployment is high.
o Communities’ fray as there is so little financial and social capital.
Conventionally charitable entities have responded with aid-based development initiatives or large scale government programmes. These bring important short-term relief but often not long-term economic & social change.
Our contention is that income and economic activity remains low in frontier nations because the traditional capital markets have failed to serve them. Investors from mature capital markets allocate investment to projects that meet their requirements for comfortable risk-adjusted returns. Companies in developing countries rarely meet these requirements, resulting in a restricted flow of investment capital. As a result, small and medium enterprises find it difficult to attract investment so essential to growth. This is socially detrimental as company growth generates employment and the innumerable societal benefits that from flow that.
Until the problem of market failure is addressed, developing nations will continue to be trapped in poverty.