Catalytic capital as market architecture: Argidius and Alterna’s impact investment ecosystem in Guatemala
In Central America, as well as in many other developing regions, SMEs currently face a critical financial gap known as the "missing middle". This means that they are, at once, too large for microfinance, and too small or too risky for the traditional financial system and risk capital funds.
This case study examines how the Argidius Foundation, through a long-term collaboration with impact promoter Alterna, used catalytic capital not only to finance enterprises, but also to patiently structure a full-fledged investment ecosystem in Guatemala by creating a “capital ladder”, through which companies are promoted all the way from their early-stage needs to capital investment for scaling up. Although initially tested in Guatemala, Alterna’s model has since been successfully expanded to five countries across Central America in less than three years.
