The present invention provides a multifunctional 2-D and 3-D matrix for propagation of stem cells. In particular, a chitosan-based biomaterial scaffold is engineered to promote CNS regeneration from primitive neural precursors by stabilizing a recombinant protein, fibroblast growth factor to preserve the cardinal properties of stem cells. The matrix, is further modified by the addition of either the extracellular matrix protein fibronectin or the small peptide RGD or IKVAV. A method to manufacture an injectable multifunctional microsphere scaffold is also disclosed that is suitable as a vehicle for cell transplantation to repair traumatic brain injuries.