Why it Matters

Small businesses across Africa and Asia struggle to access affordable growth capital, forcing many to either remain small or accept unfavorable equity terms. Aavishkaar Capital's Supply Chain Support Fund is proving there's a smarter approach—one that preserves founder ownership while scaling impact.

The Big Picture

Mumbai-based Aavishkaar Capital launched its Supply Chain Support Fund in 2022 to fill a critical financing gap in emerging markets. The fund provides $3-8 million working capital loans to small businesses in agriculture, manufacturing, logistics, and essential services—sectors that create good jobs but struggle to access traditional financing.

What's Happening

The fund just closed its latest deal with Nigerian spice company Horizon Group Africa, boosting the company's purchasing capacity from its network of over 3,000 farmers growing ginger, turmeric, cloves, cinnamon, cardamom, and black pepper. The loan will also help Horizon ramp up processing at plants in Nigeria, Tanzania, and Madagascar—keeping value-added work on the continent rather than shipping raw materials elsewhere.

The Opportunity

"The business impact is to bring more value addition to the continent, and by virtue of doing that, there is more value capture of the margins locally, which can percolate downstream to the farmers," Aavishkaar's Darren Lobo told ImpactAlpha.

Why Debt Over Equity

Many emerging market small businesses are family-owned and need capital to grow but don't want to give up ownership stakes. "They probably will not accept the kind of terms private equity or venture capital firms give," explains Aavishkaar's Ashish Patel. "Credit is a much better understood product in emerging markets."

By the Numbers

Horizon marks the fund's fourth African investment, joining apparel manufacturers Hela Apparel and Balaji, plus macadamia processor Privamnuts. The fund also has three investments in India and one in Bangladesh, with plans to close four more deals by year-end. German development bank KfW anchored the fund with $55 million, and Japan International Cooperation Agency added $40 million earlier this year.

What's Next

As equity exits become increasingly difficult in emerging markets, debt funds offer clearer returns while preserving founder control. Aavishkaar's approach combines capital with hands-on support for better accounting systems, supply chain traceability, and ESG policies that create safer, more inclusive workplaces.

The Bottom Line

While everyone talks about the equity funding drought, smart capital is following demand. Debt financing lets impact-driven businesses scale without sacrificing ownership—a model worth watching as traditional venture exits stall.

Go Deeper

• Japanese investors expanding in Africa for context on JICA's growing Africa mandate.