At the Anglo American Foundation (AAF), we believe philanthropy has a unique role to play in tackling structural barriers that continue to limit opportunity, particularly for young people seeking to participate fully in society and the economy. Across many countries, the talent, ideas and entrepreneurial drive already exist. What is often missing are the systems that allow these ideas to grow.
Philanthropy has a catalytic role to play. By working with funders, policymakers and local innovators, it can test new approaches, take calculated risks and mobilise both financial and social capital in ways that traditional markets often struggle to do.
One barrier that repeatedly emerges in this work is the so called “missing middle” in financing for micro, small and medium enterprises (MSMEs).
These enterprises are vital engines of economic growth and environmental innovation. Yet many struggle to access the capital they need to scale. They are frequently considered too risky for traditional investors, too capital intensive for grant funding and too early stage for debt. At the same time, investors often struggle to identify investable opportunities that combine strong financial potential with meaningful social and environmental impact.
South Africa illustrates this challenge clearly. Despite having relatively sophisticated capital markets, green sector MSMEs still face persistent perceptions of risk among investors. The result is a gap that prevents promising enterprises from reaching their full potential.
Over the past two years, AAF has been exploring how philanthropy can help address this gapby focusing on a central question of how philanthropic capital can do more than support individual enterprises: It must also help shift the wider system that shapes access to finance.
This exploration led us to focus on innovative finance. Working with partners, we examined whether a dedicated investment vehicle could be designed to meet the specific needs of the missing middle by providing patient and flexible capital that allows businesses to grow without the pressure of immediate debt repayments.
Just as importantly, we wanted to demonstrate to the capital markets that this approach can work.
This journey led to a partnership with Savant, with analytical support from Krutham, to co design and seed Aséli Impact Capital. The initiative is an innovative finance mechanism rooted in the South African context that aims to fund enterprises delivering measurable social and environmental impact.
The structure was developed through a year long co design process that brought together more than 30 stakeholders from across the investment and philanthropic landscape. Together we explored how a blended finance model could align incentives, reduce perceived risk and allow capital to be recycled over time.
The result is a permanent capital vehicle (PCV). In this model, returns can be reinvested into new enterprises, creating a continuous cycle of impact driven investment rather than a time bound fund that eventually closes.
Capital alone, however, is rarely enough to unlock growth.
Aséli Impact Capital has been designed to go beyond funding. Alongside investment, it will help de-risk enterprises and provide technical and commercialisation support. This gives businesses the space to focus on growth, job creation and impact before financial returns become the dominant pressure.
The vehicle made its first investments into two green MSMEs in December 2025. The goal is to raise additional third party capital to reach USD 25 million for scale up, with investment tickets expected to range between USD 300,000 and USD 2.5 million.
For AAF, the process of helping design and establish this initiative has also provided valuable lessons. Building a permanent capital vehicle requires navigating operational, strategic and governance questions that many philanthropic organisations are only beginning to explore.
Because of this, we believe these insights should be shared.
Supported by Savant and Krutham, we have documented this experience in the report Journey in Developing a Permanent Capital Vehicle. The report outlines the path from concept to first investment and highlights key lessons for philanthropies interested in exploring innovative approaches to impact investing.
Our hope is that sharing this journey will encourage others to consider how philanthropic capital can help unlock new pathways for impact. When philanthropy works alongside investors, entrepreneurs and policymakers, it can help create the conditions for enterprises to grow, jobs to be created and solutions to scale.
Addressing the missing middle will require collaboration across the philanthropic, financial and policy communities. But with the right partnerships and structures in place, philanthropy can help shift the system so that more businesses with strong social and environmental value have the opportunity to thrive.