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In a recent interview, we asked Jean-Philippe Kayobotsi, CEO of Brioche Cafe Bistro, a chain of bakery and coffee shops in Kigali, to name a business opportunity he would still like to pursue. Here was his response:
I believe there is an untapped opportunity in the financing of the so-called “missing middle”: companies that employ above 15 to 20 people, have a turnover [of more than] US$500,000 and need financing, from a couple of hundred thousand dollars to a few million dollars.
I have heard debates and read articles about this missing middle for at least 10 years now. But nothing much has changed. And the institutions that do that kind of financing are still doing it… with an approach that I would qualify as “banker plus benefits”.
They take a rather traditional banking approach with regard to collateral and the maturity of the businesses they fund. But then, in addition, structure some financial elements that can give them an upside potential.
I do not believe this is an answer to financing the missing middle. So I think there is need and room for new, creative models that can better meet entrepreneurs’ needs and aspirations.