FSD Africa has launched a new financing facility aimed at strengthening locally based investment managers and expanding access to capital for small and growing businesses across Africa.
The Manager Finance Facility, unveiled on Friday in Nairobi and Lagos, will provide flexible, returnable capital to Alternative Local Capital Providers developing new ways of financing underserved businesses.
The initiative is backed by FSD Africa, FMO, the Dutch entrepreneurial development bank, and the UK Government’s Foreign, Commonwealth and Development Office in Nigeria.
FMO’s contribution is supported through the Investing in Young Businesses in Africa programme, a Team Europe Initiative funded by the European Commission to improve access to finance for young and early-stage businesses across key African markets.
FSD Africa said the facility was created to address a financing gap affecting both small businesses and the emerging capital providers seeking to serve them.
According to the organisation, many small and growing businesses struggle to secure funding from traditional financial institutions because of high transaction costs, collateral requirements and perceived risks.
At the same time, emerging local capital providers developing alternative financing models often struggle to secure the capital required to test their approaches, build track records and attract larger investors.
The facility will provide two forms of catalytic capital — Piloting Capital and Operational Capital.
Piloting Capital will enable eligible providers to test financing models, complete early transactions and demonstrate commercial viability, while Operational Capital will support teams, systems, governance and compliance as the providers work towards financial sustainability.
The financing models targeted by the facility include revenue-based finance, flexible equity, venture debt, blended finance and local-currency structures.
FSD Africa’s Early-Stage Director, Juliet Munro, said the initiative was designed to address the funding constraints faced by emerging financiers.
“We need to finance the financiers,” Munro said, adding that the facility would help locally rooted capital providers move from testing their models to operating at scale.
FMO’s Manager for Market Creation and Financial Inclusion, Andrew Shaw, said supporting local capital providers would help create financing solutions that better reflect the way African businesses operate and grow.
“This is how we can build a stronger pipeline of investable businesses and mobilise more private and institutional capital into underserved African markets,” Shaw said.
The UK Government is supporting the Nigeria window of the facility.
Temilola Akinrinade, Investment and Capital Markets Lead at FCDO Nigeria, said the initiative would strengthen local capital providers, attract private investment and support Nigeria’s economic transformation.
Beyond providing capital, FSD Africa said beneficiaries would receive support through capacity-building and peer-learning programmes covering governance, environmental, social and governance issues, impact measurement, valuation and fundraising.
The organisation said data generated through the facility would also contribute to market intelligence on alternative financing for small and growing businesses.
Applications for the Nigeria window opened on September 1, 2026, while applications from other eligible African markets opened on September 17.
FSD Africa said the facility would prioritise emerging Alternative Local Capital Providers developing innovative financing models, including those incorporating climate resilience and gender-smart approaches.
Applicants will be assessed on their financing models, proposed use of the facility’s support, institutional needs, risk profile and other due diligence requirements before approval and disbursement.
FSD Africa said additional funding partners are expected to join the facility as it expands.
The organisation said the broader objective was to strengthen Africa’s locally based capital providers and enable them to attract larger pools of catalytic, private and institutional investment for underserved businesses.
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