FSD Africa has launched the Manager Finance Facility (MFF), an initiative aimed at strengthening locally based capital providers and expanding access to financing for small and growing businesses across Africa.
The facility is being launched with support from FMO, the Dutch entrepreneurial development bank, and the UK Government’s Foreign, Commonwealth and Development Office (FCDO) Nigeria.
FMO’s contribution is supported through the Investing in Young Businesses in Africa (IYBA) programme, a Team Europe Initiative funded by the European Commission to strengthen market creation and improve access to finance for young and early-stage businesses across Africa. FSD Africa said additional funding partners are expected to join the facility.
Small and growing businesses are major contributors to employment, innovation and economic development across the continent, but many struggle to access conventional financing because of high transaction costs, strict collateral requirements and perceptions of risk.
At the same time, emerging Alternative Local Capital Providers (ALCPs) are developing financing models tailored to the needs of African businesses but often face capital constraints themselves.
The MFF seeks to address this challenge by providing catalytic, returnable capital to ALCPs, enabling them to test innovative financing models, establish investment track records, strengthen their operations and position themselves to attract larger-scale investment.
The providers are developing instruments including revenue-based finance, flexible equity, venture debt, blended finance and local-currency financing designed to reflect the cash-flow and growth patterns of African businesses.
Juliet Munro, Early-Stage Director at FSD Africa, said the initiative was intended to strengthen the institutions providing finance to underserved businesses.
“We need to finance the financiers. Across Africa, we are seeing a new generation of locally rooted capital providers developing innovative ways of financing businesses that traditional financial institutions are not reaching,” Munro said.
She said these providers needed capital to demonstrate their models, build institutional capacity and establish the track records required by investors.
Under the facility, support will be provided through two main forms of catalytic capital: Piloting Capital and Operational Capital.
Piloting Capital will enable ALCPs to test new financing models, execute initial transactions, demonstrate commercial viability and establish investment track records.
Operational Capital, meanwhile, will support core teams, systems, governance and compliance as providers raise investment capital and work towards financial sustainability.
Beneficiaries will also have access to FSD Africa’s capacity-building and peer-learning programmes covering areas such as governance, environmental, social and governance (ESG) practices, impact measurement, valuation and fundraising.
FSD Africa said data and knowledge generated through the facility would also contribute to broader market intelligence on alternative financing for small and growing businesses.
The organisation said its ambition went beyond supporting individual capital providers, with the facility designed to demonstrate that African-led providers could develop into a credible and investable asset class capable of attracting private and institutional capital.
Andrew Shaw, Manager, Market Creation Financial Inclusion at FMO, said the initiative would help locally rooted capital providers develop financing solutions suited to the realities of African businesses.
“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 Investment and Capital Markets Lead, Temilola Akinrinade, said the UK-backed Nigeria window of the facility would support local capital providers and help mobilise private investment.
“Unlocking Nigeria’s economic potential requires financing solutions that work for its entrepreneurs and growing businesses. The UK is proud to support the Nigeria window of the Manager Finance Facility which will strengthen locally rooted capital providers, mobilise further private investment and support Nigeria’s sustainable economic transformation,” Akinrinade said.
Applications for the facility opened to Nigeria-based ALCPs on September 1, 2026, while applications from other eligible African markets opened on September 17.
FSD Africa said the facility would particularly target emerging capital providers developing innovative investment approaches, including models incorporating climate resilience and gender-smart strategies.
Successful applicants will undergo an assessment covering their financing models, proposed use of the facility’s support, institutional requirements, risk profile and due diligence before approval and disbursement.
FSD Africa said the long-term objective was to create a multiplier effect by strengthening local capital providers, increasing financing for investable businesses, supporting employment and contributing to more resilient and inclusive African economies.
, an initiative aimed at strengthening locally based capital providers and expand){kind=link}