Small Foundation, a family foundation focused on catalyzing and scaling income-generating opportunities for people living in extreme poverty in sub-Saharan Africa, has launched two pilot facilities to provide essential working capital to African fund managers. These initiatives aim to help bridge the significant $330 billion annual SME funding gap across the continent.
Emerging fund managers in sub-Saharan Africa typically take up to three years to reach their first close. During this period, they must cover operational costs, attract investors, and build a track record—often with limited resources. This challenge is particularly pronounced outside major hubs like Nigeria, Kenya, and South Africa, where funding ecosystems are less developed.
The first initiative, a US$2.5 million General Partner working capital facility, will provide long-term debt and quasi-equity funding to local fund managers, who are raising micro funds with assets under management (AUM) below US$20 million. It prioritizes emerging managers pioneering innovative fund models, focusing on rural impact, or mobilizing capital in underserved regions.
The second initiative will partner with pan-African multi-strategy investment platforms or larger funds (AUM above US$20 million) by providing working capital for pre-close and setup expenses.
These facilities form part of Small Foundation’s broader strategy to strengthen local fund managers, foster knowledge sharing among stakeholders, and invest in diverse financial vehicles that support rural SMEs at various growth stages.
By equipping local fund managers with essential resources, Small Foundation aims to enhance the investment ecosystem, enabling SMEs to access the capital they need to grow and drive innovation.
