Why African startups can be profitable and still look too risky to finance

After last week’s GEC+Africa conference, a pan-African entrepreneurship and investment summit, in Cape Town, I came away with a different way of looking at Africa’s financing problem: the continent may not have a shortage of capital as much as it has a shortage of business legibility.

There is money in banks, venture capital funds, development finance institutions and alternative lenders. There are also millions of businesses generating revenue, employing people and serving customers. The problem is that much of that…