Business and Economy

Mastercard Foundation Africa Growth Fund establish $200M Funding Facility for African SMEs

With a committed $200 million, the Mastercard Foundation Africa Growth Fund (MFAGF), a Fund of Funds, has been established to assist early-stage, growth-oriented SMEs across the African continent.

The Mastercard Foundation Africa Growth Fund seeks to provide young people, especially young women, with access to respectable and worthwhile employment. The Fund-of-Funds is audacious and a catalyst, helping to attract finance for African entrepreneurs by bolstering and reducing the risk associated with African investment entities that are dedicated to achieving gender equity in entrepreneurship.

The MFAGF will offer a business development facility for their portfolio firms in addition to funding for investment vehicles. The Fund-of-Funds initiative will apply gender-lens investing (GLI) principles to further the Mastercard Foundation’s Young Africa Works strategy, which seeks to provide access to 30 million young people in Africa, especially young women, to meaningful and respectable employment by 2030. Two investment vehicles encouraging entrepreneurial growth have so far been recruited by the Fund-of-Funds, one in West Africa and one in East African regions, respectively.

Investment vehicles with African ownership, leadership, and base of operations are often regarded as high-risk. African SMEs struggle to get the funding they require to grow, which limits their potential. By bolstering and investing in African investment instruments that help African SMEs, the Mastercard Foundation Africa Growth Fund addresses these issues.

MEDA President and CEO Dr. Dorothy Nyambi said, “We need to do everything it takes today to develop a continent with shared prosperity and sustained, inclusive growth.” Through investments in small and medium-sized businesses, “this Fund-of-Funds will build and empower a new crop of African investment vehicles to generate decent job creation for women and youth.” Increasing young employment and shifting from rhetoric to action are key to success, Dr. Nyambi stated.

“More than 75 percent of ventures funded will be led by women creating jobs,” Dr. Nyambi said. “Ultimately, our impact will be in building the investment ecosystem for investment vehicles and in the SMEs that will thrive and create dignified employment.” 

The Mastercard Foundation Africa Growth Fund (MFAGF) has assembled a stellar Investment Committee of some of Africa’s top and brightest financial and investment professionals, including: Lumka Mlambo, fund principal at the South Africa SME Fund; Mercy Mutua, Head of Access to Finance at the Mastercard Foundation; Kanini Mutooni, a shrewd investment leader; Dr. Frank Aswani, CEO of the African Venture Philanthropy Alliance (AVPA); and Hamdiya Ismaila

“The MFAGF has built up a promising pipeline of 180 diverse investment vehicles, including Early-stage, Growth, Debt and Seed VC Funds and other non-traditional funds,” saysSamuel Akyianu, MFAGF Chief of Party/Managing Director. “Five have gone through our investment screening process, two female-led investment vehicles are past due diligence and received a favorable investment decision.” Akyianu added.

According to Akyianu, the major goal is to create investments that have a positive, quantifiable impact on society and the environment while assisting in the development of a more robust and dynamic African investment ecosystem. According to him, the Fund-of-Funds is dedicated to tracking and disclosing the success of all investments in terms of gender, diversity, inclusion, social impact, and environmental sustainability in order to provide good jobs for Africa’s youth.

A group of partners, including Investisseurs & Partenaires (I&P) and Entrepreneurial Solutions Partners (ESP), Genesis Analytics, the Criterion Institute, and Africa Communications Media Group, work together to carry out the objective of the Fund-of-Fund.

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