But National Party leader Simon Bridges says it is a waste of money that will go to a "selected few", and the Government should focus on the real problem - fixing the Resource Management Act.
Yesterday, Prime Minister Jacinda Ardern announced the funding, citing 2013 research that 80 per cent of Māori freehold land was underutilised or underproductive.
On Newstalk ZB this morning, Jones, who is in charge of the $3 billion Provincial Growth Fund, said that banks had been too reluctant to lend money to develop collectively owned Māori land.
"I won't shy away from the fact that we will be working on projects that the conventional banks can't work out how they can extend money and recover the money if there's 1000 owners over a 50-acre block."
He said there would be a strict criteria for who gets money from the fund.
Bridges agreed that Māori land was not being used well, but said overhauling the RMA was the key.
"They think if they splash some cash at something, there's good politics in it. But just as with KiwiBuild, what you actually have to do is hard law reform around the RMA," he told Radio NZ's Morning Report.
"It's not a question of the financing ... At the moment with multiple owners - in some cases hundreds - it's very difficult, near impossible, to free up that land."
Reforming the law would mean taxpayers wouldn't need to become the bank of last resort for Māori land development, he said.
In his State of the Nation speech last week, Bridges said the National Party would work on drafting a reform of the RMA and have a bill ready by the end of the year.
He said there was great potential to use Māori land for viticulture, kiwifruit and general property development, but $100m was only enough to "scratch the surface" for a few projects.
But he wouldn't say whether he would scrap the funding if National became the next government, saying: "We'd have to see where it gets to."
