Resource
Catalytic capital – capital that accepts higher risk or lower returns to achieve positive impact that would not happen otherwise, is scarce. Its allocation is justified by additionality (the results of inputs that would not have happened otherwise). This report examines how nine intermediaries – funds and lenders that channel capital to agri-SMEs – define, measure, and report on their additionality.
Drawing on interviews with nine intermediaries that received first-loss and other forms of catalytic capital, the report finds that:
- SME-level additionality in the agricultural sector takes many forms across different strategies;
- that practices for assessing it vary widely, from binary determinations to formal scoring frameworks;
- that accountability around SME-level additionality remains underdeveloped;
- and that delivering additionality carries real costs that are rarely made visible to capital providers.
It presents a call to action for donors, intermediaries, and ecosystem builders to bring greater clarity, transparency, and accountability to intermediary-SME additionality – a key input into how catalytic capital should be deployed.
This report was prepared by Ellen Maginnis, Songbae Lee, and Eda Dokle, as part of the Agri-SME Learning Collective’s Catalytic Capital workstream.