The Manager Finance Facility provides flexible, returnable grant capital to help emerging Capital providers become investable at scale.
Developed by FSD Africa and Dutch entrepreneurial development bank FMO, the MFF provides grant capital to emerging fund managers building Africa’s next generation of investment vehicles.
Alternative Local Capital Providers, or ALCPs, are building financing models designed for how African small and growing businesses actually operate: revenue-based finance, flexible equity, venture debt and blended structures. Many already have a working thesis and early results.
What they don’t yet have is the track record, systems or operating runway that investors expect before they commit. That’s what the MFF is designed to address.
The Challenge
Financing the Financiers
Africa’s small and growing businesses need capital. So do the fund managers trying to reach them.
Africa’s small and growing businesses drive job creation and economic growth, yet most struggle to access the financing they need. Traditional lenders often can’t reach them: transaction costs are too high, collateral requirements too rigid, and the perceived risk too great. ALCPs are the ones stepping into that gap, but getting an ALCP off the ground comes with a financing problem of its own.
Innovative ideas don’t automatically attract investors. Most ALCP fund economics don’t work until the fund reaches a certain size, and getting there takes time. Along the way, managers face real operating costs, including team, systems and compliance, with no revenue yet to cover them and no track record yet to unlock commercial capital.
This is the “missing middle”: too far along for early grant support, too early for commercial investment. It’s the gap the MFF is designed to close.
How We Support Fund Managers
The MFF deploys two forms of flexible, returnable grant capital, designed to meet ALCPs at different points on their path to fund close. Beyond funding, supported ALCPs can also draw on FSD Africa’s capacity-strengthening support, covering governance, ESG and impact, valuation, fundraising, legal enablement and peer learning with other fund managers. The type and level of support each ALCP receives depends on its needs, its stage of development and its potential to build viability and scale.
01 — Piloting Capital
For ALCPs testing a new financing model
- Up to US$500,000 to fund early transactions and pilots, so managers can prove that their approach works and start building a track record.
- Test and refine new financing models
- Execute early transactions
- Build the track record investors expect
02 — Operational Capital
For ALCPs raising capital
- Up to US$150,000 in working capital to sustain core teams, systems, governance and compliance while managers fundraise and move towards sustainable operations.
- Sustain core teams and systems
- Strengthen governance and compliance
- Bridge cash flow while fundraising
Eligibility Criteria
The Manager Finance Facility welcomes applications from emerging Alternative Local Capital Providers developing innovative, Africa-focused financing models. We’re looking for fund managers building climate-smart or gender-smart investment approaches.
Applications will be accepted on a rolling basis until March 2028.
