Top Developing Countries for Alternative Finance

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Our emerging market alternative finance Capital Finder, which we launched in late June, is a powerful tool for entrepreneurs who wish to identify financing options in their countries and sectors, broken down by the type of funding they need (equity, loan, or grant).

It’s also a useful research tool for companies and individuals who are looking to examine the alternative finance landscapes of various regions or countries. These insights can be extremely powerful — a multilateral aid organization, for example, can examine the per capita number of impact investors in one country versus another and refocus its efforts. Or, it may look at what countries have the most access to VC funding, conduct further research to understand why some nations have had more success, and look to promote lessons learned in underperforming nations.

As a reminder, our definition of alternative finance includes venture capital firms, impact investors, angel investment networks, crowdfunding platforms, as well as public and semi-public organizations (like government-sponsored bodies, multilateral aid organizations, and NGOs) that provide funding for entrepreneurs. We count organizations that operate within the country, meaning that the firms can be based outside of the country in which they operate (think of, for example, a German impact investment firm working across East Africa).

In the coming weeks, we’ll be sharing some of those numbers with our readers. Today, however, we’ll be focusing just on the basics: which countries are world leaders in alternative finance? More specifically, we identify the top countries in terms of the number of alternative financing options available to entrepreneurs, and break down the numbers.

Here are the rankings (current as of Aug. 10):

Top 3 Countries (Overall):

  • India: 352
  • Kenya: 259
  • Uganda: 250

Alternative Finance Country Insights:

altfin breakdowns group

 

India is a clear overall leader in the space, which isn’t altogether surprising: it’s got a large, entrepreneurial population, yet only 14 percent of its ~50 million MSMEs have access to credit, according to the IFC. It’s also got a thriving crowdfunding landscape (as displayed by the number of platforms operating in the country).

There is also a lot of activity in East Africa, which is a great sign. There are a number of articles and reports that identify access to financing as a key constraint to MSME growth in the region, and it’s great that innovative funding providers are already starting to fill in the gap (you can read about some of the mobile innovations here).

As our data gets more precise, we’ll continue to share our findings with you, so make sure you subscribe to our newsletter to get the latest on emerging market alternative finance!

Image: Flickr Create Commons | ‘500 Indian Rupees’ by Miran Rijavec

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