Across frontier markets, from Zimbabwe to Zambia, Sierra Leone to Senegal, local banks hold the key to scaling inclusive, climate-aligned finance. Yet, despite decades of investment from development finance institutions (DFIs) and multilateral development banks (MDBs), the needle hasn’t moved far enough or fast enough.

According to the ARIA "Foundations of Growth" report, the share of private sector lending to the SME and agriculture sectors remains woefully low. In many African countries, private credit to GDP is below 20%, and agriculture, despite being the largest employer, is routinely underfinanced due to perceived risk, weak data, and institutional constraints.

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So where’s the bottleneck? And what can be done?

At Tese.io, we believe that part of the answer lies in the missing data infrastructure, the connective tissue between DFIs, banks, and borrowers that makes capital not only flow, but flow with confidence for impact generation.

The Problem: DFIs Are Ready—But Local Systems Aren’t

DFIs are scaling up their ambition. From the $10B SAFE initiative launched at COP28 to the World Bank’s annual $3B climate-smart agriculture commitments, capital is increasingly available for high-impact sectors.

But the absorption capacity in local financial institutions is limited. As the ARIA report notes, many banks face critical challenges, including:

• Inadequate credit underwriting systems
• Especially for agriculture and SMEs, where risk is harder to quantify and traditional financial records are limited.
• Weak ESG and impact reporting capabilities
• Most banks lack the tools to track environmental or social performance metrics, let alone report them in formats aligned with global standards like IRIS+, GRI, or IFRS S2.
• Limited use-of-proceeds and traceability infrastructure
• DFIs require accountability for where funds go and what they achieve. Local banks often rely on fragmented, paper-based manual systems that can’t meet this standard.
• Currency and maturity mismatches
• Many facilities are offered in USD or EUR, while SMEs need local currency loans with longer tenures, compounding risk for both borrower and lender.
• Slow and expensive deal origination
• For small-ticket loans, especially in rural areas, the cost of origination and monitoring often exceeds the margin.

In this environment, banks understandably hesitate to scale up lending to the very sectors DFIs want to prioritize: smallholder agriculture, women-led businesses, and green SMEs.

The Opportunity: Infrastructure Before Capital

The ARIA report is clear: capital alone isn’t enough. To move from intention to impact, financial institutions need support in building capacity and systems—especially those that enable them to operate to DFI standards.

That’s where Tese.io comes in.

Tese is a digital platform designed to help financial institutions originate, disburse, and monitor sustainable loans with embedded ESG and impact tracking. Our tools support everything from loan applications and fund traceability to compliance reporting and AI-based ESG risk alerts.

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What Tese.io Offers:

• Real-time ESG data capture (via multi-channel data input + sector-specific dashboards)
• Loan origination flows that align with DFI green/social lending criteria
• Automated reporting to reduce manual compliance burdens
• Traceable disbursement tracking and “use-of-proceeds” documentation
• Portfolio analytics for DFIs and banks to monitor aggregated impact

Rather than create parallel systems, we work with banks to digitize the systems they already use, making them DFI-compliant by design.

Why This Matters Now

The urgency for investment in climate adaptation, food security, and economic inclusion is growing—and so is the pressure on DFIs to show results. But without scalable, cost-effective monitoring systems, capital will continue to miss its mark.

As the ARIA report notes, "The development community must shift from deal-by-deal investments to investing in the systems that can generate pipelines of investments." We couldn’t agree more.

If DFIs and MDBs want to move billions into high-impact sectors, they’ll need digital infrastructure that makes local lending smarter, safer, and scalable. Tese.io provides that infrastructure—ready to be deployed, contextualized, and embedded across financial ecosystems.

Let’s Partner for Systemic Impact

Tese.io is designed to be a strategic partner to DFIs, MDBs, impact funds, and the local financial institutions they support. Whether you're deploying a green credit line, setting up a guarantee scheme, or launching a blended finance vehicle, our tools can help ensure capital flows with traceability, accountability, and measurable impact.

We invite DFI and MDB leaders to connect and explore how digital infrastructure can strengthen your programs and accelerate climate-aligned development where it’s needed most.