The Dutch Good Growth Fund (DGCF)

Launched in 2014 by the Dutch Ministry of Foreign Affairs, the Dutch Good Growth Fund (DGGF) is a blended finance vehicle designed to mobilise private investment in emerging markets and developing countries. Since its inception, the Fund has been managed by a consortium of private investment managers and operates through three complementary investment tracks.

The first track, administered by Invest International, supports Dutch companies seeking to invest in emerging and developing markets. The second track, led by Triple Jump and PwC, focuses on expanding access to finance for the “missing middle”: small and medium-sized enterprises (SMEs) that are too large for microfinance but too small or risky for commercial investors. By taking on higher levels of risk than traditional development finance institutions, this track aims to demonstrate that investments in these SMEs can generate both financial returns and positive social impact. The third track, supported by Atradius Dutch State Business (Atradius DSB), provides hedging against payment risks, alongside guarantees, covenants and financing solutions to support Dutch entrepreneurs exporting capital goods to developing countries.

The DGGF operates as a fund-of-funds, investing in local and regional intermediary funds across more than 50 countries. These intermediary funds deploy tailored financial instruments to SMEs aligned with local development priorities. To catalyse investment in underserved markets, the DGGF provides a range of instruments, including public first-loss capital (in the form of equity and subordinated debt) to de-risk investments, patient capital through flexible structuring terms, and dedicated technical assistance facilities. By 2024, nearly EUR 400 million had been committed across more than 75 intermediary funds, which in turn financed over 11,000 SMEs and supported more than 150,000 jobs.

Beyond its financial scale, the DGGF is recognised as one of the first investment vehicles to explicitly embed financial additionality and demonstration effects within its theory of change and investment process. Its eligibility criteria for intermediary funds are deliberately stringent, requiring: (i) financial sustainability, including a positive expected return; (ii) compliance with international ESG and transparency standards (OECD Guidelines, IFC Performance Standards, tax transparency); (iii) demonstrable development impact such as job creation, increased production capacity, and knowledge transfer; (iv) innovative or additional SME financing products relative to existing market offerings; (v) targeted outreach to underserved groups - including women entrepreneurs, youth under 35, and SMEs in fragile states; and (vi) robust monitoring and impact evaluation practices.