The private sector in Malawi presents a dualistic structure. On the one side, there are a few, large, formalized and foreign owned companies. On the adverse side are smaller, locally run, micro and small enterprises (SMEs) that mainly operate in the informal sector. The economic contribution of SMEs is limited due to poor entrepreneurial practices, lack of access to affordable finance options and limited product diversification. SMEs are characterized with low value addition and high levels of enterprise stagnation. Between SMEs and larger companies is a sparsely populated “missing middle” comprised of mid-sized firms. This polarized structure demonstrates a symptom of a lack of private sector development.
Building on the effective programmatic use of innovative financial instruments spearheaded by the UNDP Malawi Country Office (cfr.: Malawi Innovation Challenge Fund – MICF), Growth Accelerator was initiated with a focus on accelerating growth of innovative and ambitious SMEs with an emphasis on impact investment for sustainable enterprise development. The objective of the Growth Accelerator is to provide a competitively selected cohort of ambitious and innovative entrepreneurs with access technical assistance, co-financing and mentorship to enable growth and scaling of their businesses.
It sets out to identify innovative early-stage entrepreneurs that are seeking hands-on technical skills, mentorship and risk capital to scale-up their ventures. The key implementing partners are mHub, the lead technical organization; GrowthAfrica, the supporting technical organization; Accesserator and Kweza Equity Partners, the private equity investors. The principal partners of Growth Accelerator are UNDP and the Royal Norwegian Embassy. The relevance of the Growth Accelerator is enhanced by its alignment to the following key development frameworks:
- Malawi Growth and Development Strategy (MGDS) III, which prioritizes private sector development and entrepreneurial growth;
- The United Nations Development Programme (UNDP) Country Programme 2019 – 2023;
- The United Nations Development Assistance Framework (UNDAF), which aims to strengthen economic diversification, inclusive business, entrepreneurship and access to clean energy by 2023 in Malawi.”