The average ticket size of a UNCDF catalytic investment transaction ranges from $100,000 to $500,000, which is at the heart of the “missing middle” challenge: transactions that are too small for commercial and development banks and too large for micro-finance institutions.
The BRIDGE facility would leverage the technical capacity of UNCDF’s LDC Investment Platform, through the issuance of catalytic loans and guarantees, to enterprises and project developers that meet UNCDF’s rigorous standards for development impact and financial viability.
By providing catalytic finance to support local SME entrepreneurs, local infrastructure projects and financial service providers, UNCDF aims to prove that investing in local entrepreneurs can be viable. We hope the demonstration effect of successful examples will help transform the behavior of lenders and investors in the local economy.
UNCDF’s recent experience and its flagship report on “Blended Finance in the LDCs” reveal that deploying guarantees and catalytic first loss capital is the most successful way to unlock follow-on investment.