FMO, a Dutch entrepreneurial development bank, announced on Thursday the launch of Africa Ecosystem Catalysts Facility (AECF) in collaboration with Village Capital and RVO (the Netherlands Enterprise Agency).
The AECF is a $4 million program designed to assist startups making social and economic difference in Ghana, Nigeria, and Tanzania.
The facility will collaborate with locally-led Entrepreneur Support Organisations (ESOs) to introduce a novel method to sourcing, due diligence, and investment decision-making.
Through these collaborations, high-potential businesses will be identified and strategically invested in by utilising local expertise.
In order to find and strategically invest in businesses that create impact, Village Capital will collaborate with up to two locally-led ESOs in each market, utilising their extensive local knowledge and insights.
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Facility to offer capital pathway
In order to help investee companies move from early revenue stages to product-market fit and scaling, the facility will offer a capital pathway.
In order to secure larger funding rounds and enhance the role of ESOs in the investment process, the facility intends to test the effects of a capital pathway approach on investee companies.
In these markets, early-stage businesses play a pivotal role in creating jobs and addressing important issues like financial inclusion, economic mobility, the future of work, and climate resilience.
However, structural barriers, perceived risks, and a lack of funding options make it difficult for them to obtain capital.
By identifying capital gaps, evaluating founder potential, and tackling local issues, locally-led ESOs are essential to the development of sustainable ecosystems.
However, they continue to be underutilised in the investment process, which leaves their knowledge mainly untapped and causes funding gaps for the businesses they assist.
Comments from partners
“RVO, and more specifically the Orange Corners Innovation Fund (OCIF) program, is excited to embark on this new strategic partnership with FMO and Village Capital,” shared Kars Gerrits, Coordinator OCIF at The Netherlands Enterprise Agency (RVO). “This collaboration marks an exciting step forward, as both RVO and FMO, as Dutch development organisations, are joining forces to address critical funding gaps in the entrepreneurial ecosystems in these African countries. By building on the foundation of OCIF, we remain committed to fostering enterprise growth, with a specific focus on youth and women entrepreneurs.”
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“This partnership is the first of its kind between FMO and RVO, and it represents an exciting step forward in our collective effort to close the funding gap in these countries,” says Susan Nakami, Africa Region Lead at Village Capital.
“By leveraging insights from each of the three partners, we are drawing from existing programs and partnerships that are already designed to unlock capital in these markets. Village Capital has been working with locally-led ESOs for nearly a decade, and we’ve seen firsthand how often investors overlook their expertise. Through this partnership, we’re not just unlocking crucial capital, but also strengthening local ecosystems and creating a more sustainable pathway for high-potential companies to drive economic growth and sustainability in the region.”
Speaking on FMO’s role in the partnership, Claire Nyambori, Technical Assistance Officer at FMO, shared, “Through FMO’s 2030 strategy focused on market creation, we aim to transform early-stage companies into viable, investment-ready projects. This partnership allows us to leverage our combined strengths and work directly with locally-led ESOs and businesses to create impact. We are excited to work alongside RVO and Village Capital to drive meaningful market growth and support businesses that will be central to the economic development of the region.”