A new financing initiative supported by the United Kingdom Government and the Dutch development bank FMO is set to address funding challenges facing small and growing businesses in Nigeria by strengthening local institutions that provide alternative sources of capital.

The initiative, known as the Manager Finance Facility (MFF), was launched by FSD Africa to support emerging Alternative Local Capital Providers (ALCPs) in developing innovative financing solutions that better reflect the cash flow and expansion needs of African businesses.

The facility receives backing from the UK Government’s Foreign, Commonwealth & Development Office (FCDO) Nigeria and FMO, with additional funding partners expected to join as the programme expands.

Unlike conventional grant schemes that provide direct financial assistance to businesses, the MFF will channel catalytic, returnable capital to local financing institutions. This support is expected to help them test new funding models, complete early transactions, build investment records and strengthen their operational capacity.

Facility to Support Innovative Financing Models

The MFF will deploy its resources through two major components: Piloting Capital and Operational Capital.

Piloting Capital will support the testing of innovative financing structures and the execution of early-stage transactions, while Operational Capital will help emerging providers improve their teams, systems, governance and compliance processes.

The facility will explore several alternative financing models, including revenue-based financing, flexible equity, venture debt, blended finance and local-currency funding arrangements.

These approaches are intended to provide businesses with funding options that may be more suitable than conventional lending, particularly for enterprises that struggle to meet traditional financing requirements.

FSD Africa: Local Financing Institutions Need Support

Juliet Munro, Early-Stage Director at FSD Africa, said the initiative was developed to tackle financing challenges affecting both growing businesses and the institutions seeking to fund them.

According to Munro, strengthening the capacity of local financiers is essential because they need capital to demonstrate the effectiveness of their business models, build credible institutions and establish the track records required to attract larger investors.

The programme’s approach is therefore centred on strengthening the institutions that finance businesses, rather than providing grants directly to individual enterprises.

UK, FMO Highlight Investment Mobilisation Potential

Temilola Akinrinade, Investment and Capital Markets Lead at FCDO Nigeria, said the UK-backed Nigeria component of the facility is designed to strengthen locally rooted financing institutions, attract additional private investment and contribute to sustainable economic transformation.

Similarly, Andrew Shaw, Manager of Market Creation Financial Inclusion at FMO, noted that supporting local capital providers could help expand the pipeline of investment-ready businesses and draw more private and institutional capital into underserved African markets.

For Nigeria, the initiative could create opportunities for alternative financing institutions to expand their reach and improve access to capital for businesses that have historically faced funding constraints.

Capacity Building and Investment Readiness

Beyond financial support, participating institutions will benefit from capacity-building programmes and peer-learning opportunities.

The support will cover areas such as corporate governance, environmental and social considerations, impact measurement, business valuation and fundraising.

FSD Africa also intends to use the programme to generate market data and evidence on alternative financing models. The broader objective is to demonstrate the investment potential of African-led capital providers and help them attract larger pools of capital.

The facility is expected to encourage the development of sustainable local financing institutions capable of supporting businesses over the long term.

Applications Open to Nigerian Capital Providers

Applications for Nigeria-based Alternative Local Capital Providers opened on September 1, 2026, while applications from other eligible African markets commenced on September 17, 2026.

The programme is particularly interested in emerging financing institutions developing innovative investment approaches, including models that incorporate climate resilience and gender-smart strategies.

Ultimately, the Manager Finance Facility aims to create a multiplier effect across African markets by strengthening local financing institutions, improving access to growth capital for businesses and encouraging greater participation from private and institutional investors.

If successful, the initiative could help expand the range of financing options available to Nigerian businesses seeking capital to scale their operations.

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