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Africa Growth Fund

Frequently Asked Questions

 

What is the Mastercard Foundation Africa Growth Fund?

The Mastercard Foundation Africa Growth Fund is a Fund of funds (FoF) — that works through African Investment Vehicles (IVs) and Fund Managers (FM)* to support SMEs. The Mastercard Foundation Africa Growth Fund doesn’t directly invest in small businesses (SMEs) but through investments in IVs. The ultimate goal is to enable dignified and fulfilling work for young people, particularly young women.

*Investment Vehicle/Fund Manager: An investment vehicle is any risk capital vehicle that pools investor capital to invest in enterprises and these vehicles include the range of private equity, venture capital, holding companies, and SME debt funds as examples. 
A Fund Manager is responsible for managing the investment activities of a fund, and hand holds the portfolio of SMEs through value creation for their growth.

The program is an initiative of the Mastercard Foundation managed and led by the Mennonite Economic Development Associates (MEDA). MEDA delivers the initiative, together with a Consortium of partners, namely Investisseurs & Partenaires (I&P) as the Fund Advisor, ESPartners (ESP) as the Business Development Services (BDS) provider, Criterion Institute as the Gender Equity Diversity and Inclusion Partner, Genesis Analysis as a learning Partner, and Africa Communications Group as a Communications Partner.

 

 

What kind of Funds or Investment Vehicles does the Mastercard Foundation Africa Growth Fund invest in?

The Fund invests in African-owned and African-led Fund Managers, including Female-led fund managers, first-time fund managers, private equity funds, venture capital funds, debt funds, permanent capital vehicles, etc. These funds need to demonstrate commitment to gender, diversity, equity, and inclusion; they should invest in SMEs with a ticket size range between US$50k to US$4 million that invest in high-impact sectors and operate in Sub-Saharan Africa.

 

 

Can SMEs apply for direct finance from the Mastercard Foundation Africa Growth Fund?

The Mastercard Foundation Africa Growth Fund does not directly invest in SMEs. The Fund invests in Investment Vehicles (IVs) that, in turn, invest in SMEs.

 

 

Can Male-led Fund Managers apply?

Male-led IVs also qualify for funding if they can demonstrate a gender-diverse team at partnership, governance, and senior management levels and satisfy at least one indicator of the two criteria to qualify for funding. These criteria are:

  • For multiple partner teams: At least one female partner is involved in decision-making, and women represent at least 30% of the investment team.
  • For single partner teams: At least 30% of the investment team is female.

 

 

Does the Fund target specific regions in Africa?

The Fund welcomes applications throughout the Sub-Saharan African region and in countries aligned with the Mastercard Foundation Young Africa Works (YAW) Strategy, namely Ethiopia, Ghana, Kenya Nigeria, Rwanda, Senegal, and Uganda.

 

 

What are the different supports that the Mastercard Foundation Africa Growth Fund provides to the Investment Vehicles and Fund Managers?

In addition to committing capital, the Fund offers Business Development Services (BDS) and technical assistance exclusively to the Investment Vehicles (IVs) and Fund Managers (FMs) in which it invests to ensure their success.

 

 

What additional kind of support does the Mastercard Foundation Africa Growth Fund offer?

The Fund may also provide Warehousing Capital and Working Capital to Fund Managers who have gone through our initial screening process. Note this requires investment committee approval.

 

 

What is Warehousing and Working Capital?

Warehousing Capital/Portfolio Building Capital

Warehousing Capital is a game-changing investment strategy unlike any other. This special fund is designed to give eligible fund managers a golden ticket to access capital for portfolio building. Fund Managers may use this capital for warehousing deals, creating a track record that sets the stage for successful fundraising ventures.

The warehousing capital offers eligible fund managers the opportunity to access capital for portfolio building. This capital can be utilized for warehousing deals, allowing managers to establish a track record and enhance their prospects for successful fundraising endeavors.

It's more than just an investment; it's a strategic move to empower fund managers, elevate their prospects, and build a future where impactful initiatives flourish.

Working Capital/Operational Funding

We understand the challenges and the needs of First-time and Emerging Fund Managers. We offer Working Capital, specifically designed to cover pre-close and set-up expenses for those aspiring and emerging Investment Vehicles that are ready to make a difference.

The Fund can additionally support pre-close and set-up expenses for aspiring and emerging IVs through repayable grants tailored to specific financing needs, provided under certain conditions. Capital will only be made available to IV teams that are likely to be invested in by the Fund (first approval from the screening Investment Committee received). 

It's not just about funding; it's about empowering your vision. Under certain conditions, we provide repayable grants tailored to your specific financing needs.

 

 

What does gender-lens investing mean for the Fund?

Gender-lens investing for the Fund entails ensuring that our portfolio of Investment Vehicles incorporates strategies and practices that address gender-related considerations throughout the investment cycle. This approach aims to eliminate biases and enhance women’s access to investment capital, supporting women-owned businesses.

 

 

How does the Fund ensure transparency and fairness in the selection process?

The Fund adheres to a rigorous and transparent process, guided by its investment policy and specific criteria in alignment with its mission and impact objectives. The process involves several steps:

  1. The Fund Advisor builds the pipeline of potential Funds that meet the criteria of the Investment Strategy and Investment Policy of the Mastercard Foundation Africa Growth Fund. The selected Funds are submitted to the Investment Committee for their independent review through a two-stage approval process.
  2. The independent Investment Committee (IC) conducts a thorough screening review. It either declines or recommends potential investments for  Due Diligence (DD) by the Fund Advisor, and supported by the Consortium of Partners. Following Due Diligence (DD), the Fund advisor prepares a summary investment memo and presents this for the  IC to either decline the prospective IV or recommend the IV for a potential investment to the MEDA Mauritius Foundation Council.
  3. The Foundation Council (FC) independently reviews all recommended deals and decides.