More than $750m (£517m) will be pumped into small- and medium-sized businesses in the developing world, to reduce poverty by a new group of foundations and for-profit social venture funds, it has been announced.

The Aspen Network of Development Entrepreneurs (ANDE) aims to invest the money during the next five years in businesses within developing countries that are too big for microfinance but too small and inexperienced for mainstream finance. 

Research conducted for ANDE by Dalberg Global Development Advisors showed that the volume of loans made in both the microfinance and small-scale private equity sectors were each six times greater than those in the small and growing business sector.

“An entire segment of entrepreneurs in the developing world – those with small, growing businesses – are seen as too risky an investment by local banks,” said Chris West, director of the Shell Foundation, one of the members of the network. “Without access to business skills training and finance these companies hit a glass ceiling, and Africa misses out on a major engine of economic growth.”

The network will supply business training and support services along with finance. Randall T. Kempner, executive director of ANDE said, “In the long-term, our goal is to create the real possibility that the next Bill Gates or Richard Branson could come from a developing country.”

ANDE includes 35 leading funders including Google.org, the Rockefeller Foundation and the Bill and Melinda Gates Foundation. It will be based at the Aspen Institute in Washington D.C.