Financial Sector Deepening (FSD) Africa has inaugurated the Manager Finance Facility (MFF), an initiative designed to strengthen Africa’s emerging generation of alternative local capital providers.

The facility, inaugurated in Lagos and Nairobi, is also designed to help unlock more appropriate financing for small and growing businesses across the continent.

This is contained in a statement made available on Friday by the senior press and public affairs officer at the British High Commission, Ndidiamaka Eze.

FSD Africa is a specialist development agency making finance work for Africa’s future in over 30 countries.

It works with governments, regulators, investors and financial institutions to strengthen markets, shape policy and mobilise capital into opportunities supporting growth, climate resilience, the clean-energy transition and nature-positive development.

The statement said the facility was inaugurated with support from FMO, the Dutch entrepreneurial development bank and the UK Government’s Foreign, Commonwealth and Development Office (FCDO) Nigeria.

It quoted the early-stage director, FSD Africa, Juliet Munro, as saying that the financiers needed to be financed.

She said Africa was seeing a new generation of locally rooted capital providers developing innovative ways of financing businesses that traditional financial institutions are not reaching.

Ms Munro, however, said those providers needed capital themselves to prove their models, build their institutions and develop the track records that investors require.

“The MFF is designed to bridge this gap – helping promising providers move from experimentation towards scale, channelling more and more appropriate capital to African businesses in the longer term. The MFF will provide support through two principal forms of catalytic capital, both designed as flexible, returnable capital rather than conventional grants.

“Piloting Capital will enable Alternative Local Capital Providers (ALCPs) to test innovative financing models and execute early transactions. It will also demonstrate commercial viability and build the investment track records required to attract larger pools of capital.

“Operational Capital will provide working capital to support core teams, systems, governance and compliance while ALCPs raise investment capital and move towards financially sustainable operations,” she said.

Ms Munro said providers supported through the facility would also have access to FSD Africa’s wider capacity-strengthening and peer-learning initiatives.

The initiatives, she said, would cover aspects such as governance, ESG, impact measurement, valuation and fundraising.

The statement also quoted Andrew Shaw, manager of Market Creation Financial Inclusion, FMO, as saying that Africa’s small and growing businesses needed financing solutions that reflected how they operated and grew.

Mr Shaw said that by backing locally rooted capital providers with catalytic capital, the MFF would help promising models build a track record, strengthen their institutions, and become ready for larger pools of investment.

“This is how we can build a stronger pipeline of investable businesses and mobilise more private and institutional capital into underserved African markets,” he said.

The statement also quoted FCDO Nigeria Investment and Capital Markets Lead Temilola Akinrinade, who said unlocking Nigeria’s economic potential required financing solutions that worked for its entrepreneurs and growing businesses.

Ms Akinrinade said the UK was proud to support Nigeria’s window of the MFF.

According to her, it will strengthen locally rooted capital providers, mobilise further private investment and support Nigeria’s sustainable economic transformation.

‘’It forms part of the UK’s wider partnership with Nigeria to increase investment, create jobs and deliver mutual growth,” Ms Akinrinade said.

The statement said applications to the MFF opened for Nigeria-based ALCPs on September 1, while applications from other eligible African markets opened on September 17.

It said successful applicants would progress through an assessment process covering their financing model and proposed use of MFF support.

It also said the process would cover institutional needs, risk assessment and due diligence before approval, contracting and disbursement.

The MFF’s inauguration brings together FSD Africa, FMO, and FCDO Nigeria around a shared objective: strengthening institutions capable of deploying capital to underserved African businesses. 

(NAN)