Solvency and financial health The financial health of social enterprises presents a mixed picture, with approximately one in two struggling with low solvency – heavily reliant on unpredictable revenue or donor funding, limited cash reserves and volatile financial performance. A further 41% indicate medium solvency, generally able to meet obligations through a blend of revenue and donor support, maintaining moderate reserves and some predictability despite occasional uncertainty. Only 9% demonstrate high solvency, supported by diversified, reliable revenue streams, stable donor funding and substantial reserves. This distribution reveals widespread financial fragility and underscores the need for more stable income generation and improved access to sustainable finance. Solvency levels of social enterprises FIGURE 16 High solvency Medium solvency Low solvency9% 41% 50% Source: Survey data, World Economic ForumKey insights BOX 3 The financing landscape for Africa’s social enterprises reveals strong ambition but structural financial gaps. Approximately 49% of social enterprises have sought external funding in the past three years, yet only 33% have succeeded – underscoring the difficulty of accessing appropriate capital. Grants dominate both demand and success (sought by 64%, secured by 56%), while informal sources such as family and friends remain vital (sought by 34%, secured by 28%), reflecting adaptability but also dependence on unpredictable finance. Formal enterprises are more likely to access institutional funding – 1.95 times more likely to seek impact investors and 2.71 times more likely to secure such funding – while informal enterprises rely more on community-based options such as crowdfunding and family networks. Solvency remains a core concern: 50% report low solvency, highlighting vulnerability from volatile revenue and limited reserves. Financing patterns shift modestly across stages – early-stage social enterprises lean on grants and informal support, while growing and established social enterprises engage more with impact investors and banks, though traditional venture capital remains minimal across all stages. These trends highlight an urgent need for stage- appropriate blended finance, investment- readiness support and financial instruments tailored to social enterprise models that deliver both impact and sustainability. Credit: Medtronic LABSLow solvency Medium solvency High solvencySeed stage Start-up stage Growth stage Established stage Expansion stage77% 17% 6% 63% 32% 5% 36% 56% 8% 33% 45% 22% 23% 44% 33% Percentage (%) 34 The State of Social Enterprise: Unlocking Inclusive Growth, Jobs and Development in Africa

State of Social Enterprise Africa 2025