State of Social Enterprise Africa 2025

Seed stage Start-up stage Growth stage Expansion stage Established stage Sought finance Did not seek finance37% 63% 46% 54% 54% 46% 58% 42% 61% 39% 32% 19% 17% 9% 13% 6% 12% 6% 12% 6% 10% 5% 6% 3% 6% 3% 2% 1%Grants Family and friends Impact investors Crowdfunding Bank loans Angel investors Microfinance Traditional venture capital Other Sought SecuredFormal vs. informal capital-raising strategies A social enterprise’s formal or informal status influences the types of finance it seeks and successfully secures. Formal enterprises that sought external finance are more likely to pursue institutional funding or finance. They are 1.59 times more likely to seek grants, 1.95 times more likely to seek finance from impact investors and 1.61 times more likely to seek out angel investors than their informal counterparts. They also have a slightly higher propensity to seek bank loans (1.12 times) and microfinance (1.55 times). This trend points to a greater engagement with the formal ecosystem of funders and financiers.Informal enterprises that sought external finance, in contrast, rely more heavily on community-based and alternative capital-raising models. They are 1.6 times more likely to seek capital from family and friends and 1.56 times more likely to seek crowdfunding than formal enterprises. This distinction is also reflected in their success rates. Formal enterprises that secured funding are significantly more successful in securing institutional funding or finance, being 2.71 times more likely to secure finance from impact investors, 1.65 times more likely to secure angel investor finance and 1.47 times more likely to secure grant funding. Informal enterprises that secured funding were, however, more successful with crowdfunding (1.79 time) and securing funding from family and friends (1.92 times). Informal social enterprises seeking and successfully securing finance FIGURE 11 7%12% 9%15% 1%4% 3%6% 5%10% 2%4% 1%2% 2%3% 1%1%Grants Family and friends Impact investors Crowdfunding Bank loans Angel investors Microfinance Traditional venture capital Other Sought Secured Source: Survey data, World Economic Forum Credit: Schwab Foundation for Social Entrepreneurship The State of Social Enterprise: Unlocking Inclusive Growth, Jobs and Development in Africa 31