Posted: Wednesday February 01, 2012 5:04 PM BT
The results for Round One of SME Finance Innovation Challenge Fund (SME Finance - ICF) have just been announced, in which GO Finance Company Ltd through an independent Panel was selected as the sole winner of the challenge fund grant.
The ICF received 19 completed applications. 12 of these were assessed as unsuitable for the competition, because of their essentially microfinance focus, not on the distinct needs of SMEs. This is not to say that the business ideas were useless or uninteresting, just that they did not fit the strict competition rules. Three others were found to be ineligible because, in spite of clear instructions given to applicants, the idea was no more than an attempt to increase the concerned organisations’ stock of lending capital. One, though eligible in other ways, failed to persuade the panel of its commercial viability.
This left three interesting and innovative applicants who were invited to submit detailed plans in the second phase of the competition. They covered incubation of start-up agri-businesses, factoring of SME invoices and lending to SMEs specializing in fast moving consumer goods. The factoring of SMEs invoice proposal dropped out for not yet being at a sufficiently complete stage of development. In the end the independent panel decided that the agricultural SME proposal, though interesting and relevant, was insufficiently commercial and would always be dependent on subsidy.
The sole winning entrant is in the process of negotiating a detailed contract with the FSDT for a Grant of US$ 152,000. Congratulations to GO Finance Ltd., an initiative of a group of enterprising and creative young Tanzanians with corporate banking experience.
Lessons for Round 2
As can be seen from the experience of the first round the competition is tough, with serious rules and conditions. Nevertheless, we are convinced that there are more good ideas out there, worthy of support. Applicants are asked to read the guidance provided carefully, to improve chances of success.