The UK Foreign, Commonwealth and Development Office (FCDO) Nigeria and FMO, the Dutch entrepreneurial development bank, have partnered with FSD Africa to launch a new facility aimed at expanding access to finance for small and growing businesses across Africa.
The Manager Finance Facility (MFF) is designed to strengthen a new generation of alternative local capital providers (ALCPs) and enable them to channel more appropriate financing to underserved businesses across the continent.
FMO’s contribution to the facility is supported through the Investing in Young Businesses in Africa (IYBA) programme, a Team Europe Initiative funded by the European Commission to support market creation and improve access to finance for young and early-stage businesses in key African markets.
Additional funding partners are expected to join the facility as it expands.
The initiative brings FSD Africa, FMO and FCDO Nigeria together around the objective of strengthening locally rooted institutions capable of providing capital to businesses underserved by traditional financial institutions.
Commenting on the initiative, FMO’s Manager, Market Creation Financial Inclusion, Andrew Shaw, said the facility would help alternative capital providers develop sustainable financing models and attract larger pools of investment.
“Africa’s small and growing businesses need financing solutions that reflect how they operate and grow. By backing locally rooted capital providers with catalytic capital, the Manager Finance Facility will help promising models establish a track record, strengthen their institutions and become ready for larger pools of investment,” Shaw said.
FCDO Nigeria’s Investment and Capital Markets Lead, Temilola Akinrinade, said the initiative would support Nigeria’s entrepreneurs and growing businesses by strengthening local capital providers and mobilising additional private investment.
“Unlocking Nigeria’s economic potential requires financing solutions that work for its entrepreneurs and growing businesses,” Akinrinade said.
She added that the UK’s support for the Nigeria window of the facility formed part of its broader partnership with Nigeria to increase investment, create jobs and support sustainable economic growth.
FSD Africa’s Early-Stage Director, Juliet Munro, said the facility was based on the need to provide capital to institutions that finance businesses that conventional financial institutions often overlook.
“We need to finance the financiers,” Munro said, noting that emerging locally rooted capital providers were developing innovative financing models but often lacked the capital required to prove their models, strengthen their institutions and establish investment track records.
According to FSD Africa, small and growing businesses remain an important source of employment, innovation and economic development across Africa but continue to face financing constraints due to high transaction costs, collateral requirements and perceptions of risk.
At the same time, emerging ALCPs are developing alternative financing models but face funding constraints of their own.
The MFF is intended to address this gap by providing catalytic, returnable capital to ALCPs to test innovative financing models, complete early transactions, demonstrate commercial viability and strengthen their operations.
The facility will provide two principal forms of support: Piloting Capital and Operational Capital.
Piloting Capital will enable providers to test new financing models, execute early transactions and build investment track records, while Operational Capital will support teams, systems, governance and compliance as providers work towards sustainable operations.
Supported institutions will also have access to FSD Africa’s capacity-building and peer-learning programmes covering governance, environmental, social and governance issues, impact measurement, valuation and fundraising.
The facility will support financing approaches including revenue-based finance, flexible equity, venture debt, blended finance and local-currency structures designed to reflect the cash-flow and growth realities of African businesses.
FSD Africa said the initiative was intended to go beyond supporting individual capital providers by demonstrating the potential for African-led alternative finance institutions to develop into a credible and investable asset class capable of attracting private and institutional capital.
The organisation said additional catalytic investors would be able to participate as the facility develops, with further funding partners expected to be announced.
Applications for the MFF opened to Nigeria-based ALCPs on September 1, 2026, while applications from other eligible African markets opened on September 17.
The facility is particularly targeting emerging capital providers developing innovative financing models, including those incorporating climate resilience and gender-smart strategies.
Successful applicants will undergo an assessment covering their financing models, proposed use of MFF support, institutional requirements, risks and due diligence before approval and disbursement.
FSD Africa said the ultimate objective was to strengthen locally based capital providers, increase financing for underserved businesses, support employment and contribute to more resilient and inclusive African economies.
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