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Revenue Capital: A Guide to the Understanding, Promotion, and Implementation of Revenue-Based Finance for Fast-Growth SMEs in the Middle East and North Africa

Tom Gibson, Christopher Davis, Christy Sisko
SMEThink, Asia & Middle East Economic Growth Best Practices Program
United States Agency for International Development (USAID)
June 19, 2017

The purpose of this document is to Guide the reader through an incrementally deeper understanding of a type of finance that is being called by many “revenue capital.” Revenue capital, or RC, is proposed as another useful tool with the potential to support the growth of small- and medium-sized enterprises (SMEs). The Guide is organized as a series of questions posed in what we hope is a logical sequence, answered in language that is familiar to nonfinancial development professionals, and persuasive to persons working in the financial sector.

The Guide is above all intended to answer a single question often posed in the Middle East/North Africa (MENA) region: How do we provide access to finance to high-potential SMEs that either have insufficient collateral to obtain a bank loan nor are appropriate candidates for private equity or venture capital (VC)? This is a crucial question for economic growth efforts in all developing and emerging markets. It is particularly significant for MENA’s SME sector, given the low level of SMEs’ use of banks for business financing and the strong bias of private equity funds in the region toward larger investments.

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