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Paper short abstract:

This paper explores the growing African development finance industry by analysing Nigerian entrepreneurs' experiences with impact investing. Highlighting struggles to access sustainable financing, the paper details the recreation of social hierarchies and inequalities entrenched in development.

Paper long abstract:

In recent years, growing global emphasis has been placed on the importance of widening the marketplace for development financing (Mawdsley, 2016), with particular focus on models like impact investing in African markets (GIIN, 2016). However, despite expansion of ideologies like ‘Africa rising’ and ‘Africapitalism’, most literature focuses on how financiers (private equity funds, institutional investors) are changing the African development eco-system (Watts and Scales, 2020) with little scholarly or policy-focused attention placed on the demand-side of African impact investing. This paper highlights findings from a recent mixed-methods study by the Cambridge Judge Business School, revealing key insights from Nigerian business owners who seek sustainable social financing. While there are notable success stories, this paper reveals considerable challenges and long-term sustainability issues that Nigerian social entrepreneurs face despite seemingly having access to new frontiers in financing. The paper further explores how entrenched social and financial hierarchies prevalent in traditional development (international aid, philanthropy) are in many ways recreated through impact investing models, even more so when considering the small size of the average impact investments in Nigerian businesses. Through gender and geographical lenses, the picture becomes even more challenging, as women and entrepreneurs in rural areas continue to face considerable hurdles in access to impact investments. When considering the future of Nigerian development financing, this paper argues that substantial advances can be made through impact investment, however, greater importance must be placed on elevating demand-side priorities and increased learning from the local experiences.