In recent years, there has been a growing recognition of the important role that small and growing businesses (SGBs) play in driving economic growth and reducing poverty in Africa and the Middle East. However, despite their potential, SGBs often face significant challenges in accessing finance and other forms of support to help them formalize and scale their businesses, and there often exists a missing middle between businesses that would normally get support from Microfinance Institutions and those that would be able to obtain financing from banks. This is where Fund Managers like GroFin come in. GroFin is an impact driven SME financier that provides capital through a Blended Investment Fund. 

We recently sat down with Ashraf Esmael, a seasoned finance professional with extensive experience in microfinance and SME finance, and GroFin’s Chief Investment Officer of the Middle East. Ashraf spoke about his career path and his current role at GroFin. During the discussion, Ashraf highlighted the importance of supporting SGBs in the region and explained how GroFin is working to provide risk finance and business support to help them succeed, often using a blended finance structure.

GroFin's approach involves a combination of funding and technical assistance, which is tailored to the specific needs of each business. The company's focus on impact investing means that it seeks to achieve both financial returns and positive social and environmental outcomes. To do this, GroFin looks for candidates with a range of skills and backgrounds, including financial acumen, investor relations skills, PR skills, and analytical skills. The company also hires individuals from diverse backgrounds for roles in marketing, content development, and fund accounting.

Ashraf emphasized that mission alignment and passion for the work are key qualities that he looks for in a candidate for GroFin. He also noted that different roles require different qualities, such as being a go-getter for investor relations or having strong analytical skills for more detailed roles. He stressed the importance of considering context and demand when it comes to impact investing, and sometimes there may be trade-offs between financial returns and impact.

In the second part of the discussion, Ashraf fielded a few questions from the community, here’s a summary of some of his insights: 

What do you think are the most important tech innovations for SMEs in developing markets to grow and scale? Ashraf started off his career in the tech sector, and his answer was rooted in going back to the foundations of business management, basic management information systems and financial analytics are crucial for growth and sustainability. Fintech players can provide solutions in areas such as payment infrastructure, and Ashraf emphasized that there is a lot of innovation happening in this area. 

What are some of the challenges you’ve had with businesses and how have you been able to use technical assistance to address them? In response to this, Ashraf laid emphasis on the importance of partnerships and expertise in addressing specific issues faced by SMEs. He mentioned several examples of partnerships with organizations like PUM, a network of senior expert resources they have access to subsidized by the Dutch, and stressed the need to tap into the expertise of others in order to provide effective technical assistance to SMEs.

Supporting SGBs in Africa and the Middle East is critical for driving economic growth and reducing poverty in the region. Fund management companies like GroFin play a vital role in providing the finance and technical support that these businesses need to succeed. By hiring candidates with a range of skills and backgrounds, and by working in partnership with other organizations, GroFin is making a significant impact in the region and helping to build a more inclusive and sustainable future.

This insight is based on a Path to Impact Session with Ashraf Esmael, Path to Impact Sessions feature industry insiders speaking candidly about their impact finance career journeys. They give participants a chance to ask questions and engage in a small group setting. Take part in our upcoming lineup of events by signing up to become an INSIDER. You can also watch a recording of our previous events in our webinar catalog.

More from this Path to Impact session:

• Ashraf answers a question on the optimal mix of different types of capital and what he’s seen in across the industry, and speaks on potential conflicts that arise in a capital mix
• Ashraf speaks on the future of growth and what he’s most excited to see, given how SME financing has evolved over the years
• Ashraf responds to a question on the main challenges when it comes to SME lending that, and why blended models and the use of technical assistance have become so essential to this