GSG Impact has contributed to a new report by the Dutch Good Growth Fund (DGGF) exploring how local capital can be mobilised to finance small and medium enterprises (SMEs) in emerging markets.

While SMEs face a significant financing gap, many emerging markets also have substantial pools of domestic capital held by pension funds, insurers, banks, development institutions, family offices and other investors. Local Capital Mobilization for SME Funds examines what prevents more of this capital from reaching SMEs and what has enabled mobilisation in practice.

The report builds on a webinar co-hosted by DGGF and GSG Impact in September 2025 and draws on four case studies: Ci-Gaba in Ghana, Fonds Mohammed VI in Morocco, Fundación Bancolombia and Alive Ventures in Colombia, and SIDBI in India.

What enables domestic capital mobilisation

Across the case studies, the research highlights the importance of engaging prospective investors early, using credible local anchor investors, responding to the commercial motivations of different capital providers, and combining investment vehicles with wider market-building efforts.

It also identifies three preconditions for mobilisation at scale: a sufficiently mature investment ecosystem, enabling regulation, and a public sector that creates the conditions for private investment while preserving independent investment decision-making.

Building on experience

The GSG Impact Partnership has practical experience in designing investment vehicles that mobilise domestic capital, such as in Ghana where the Ci-Gaba fund of funds uses a 30% layer of catalytic capital to unlock 70% local pension capital.

This experience is informing GSG Impact’s broader domestic capital mobilisation work. We will examine the barriers and enabling conditions for mobilising domestic capital across markets, identify practical examples of mechanisms that have worked, and help National Partners and other market builders move from diagnosis to action.

Local Capital Mobilization for SME Funds’s findings reinforce a central principle of GSG Impact’s work: significant domestic capital already exists in many emerging markets. The opportunity is to create the right structures, incentives and market infrastructure to connect it with SMEs and other impact opportunities.

Read the full knowledge product here