Hello Tractor 25d ago

When development partners have capital specifically designed to take risk — DFI capital, blended finance, climate finance, catalytic capital — yet that capital still struggles to deploy in places like Somalia, the problem is no longer the SMEs. It is the financial system around them. At the Hello Tractor Experience Center, conversations during AVCA focused on a hard truth facing frontier markets: the issue is not a lack of capital, but a lack of structures capable of deploying it effectively. In partnership with the Somali Development and Reconstruction Bank, we brought together investors, operators, and institutions to unpack what is preventing capital from reaching productive businesses across Somalia and similar markets. More than 2 million SMEs remain locked out of financing. Agriculture employs over 60% of the population yet receives less than 2% of formal credit, while businesses needing long-term asset financing are still being matched with short-term capital cycles. Maybe the real capacity gap is not with the SMEs trying to raise capital, but with the institutions still unable to deploy it.