List all the funding sources that are required for the sustainability of this solution
PROGRAM FUNDING SOURCE AMOUNT $
SME CapitalFund 1. Developmental Financial institutions 4 000 000.00
2. Private Equity Firms 1 000 000.00
3. Local Financial Institutions 1 000 000.00
Capacity Building 1. Developmental Institutions 500 000.00
2. Non-Governmental Organization 100 000.00
3. Private Organizations 50 000.00
WiSnet 1. Trade Bodies 50 000.00
2. Private Enterprise 100 000.00
3. Developmental Institutions 1000 000.00
Advocacy 1. Private Enterprises 10 000.00
2. Non-Governmental Organizations 15 000.00
3. Trade Bodies 10 000.00
4. Developmental Institutions 20 000.00
TOTAL FUNDINNG REQUIRED 7 845 000.00
Funding requirements are for the Zimbabwe pilot project
Demonstrate how your proposed solution has the capacity to graduate from dependence on public finance. What is the time frame?
The proposed solution will offer fee based services. For example, when web directory is launched, firms will be paying fees towards the administration and maintenance of the sight so as to maintain perpetuity of the platform. Public finance will only be required as initial capital to cover various expenses that will be incurred in the setting-up of the platform. Consultations on the setting-up of the platform will take the majority of time, estimated to be three to four months for the pilot project. The actual web designing domain registration and hosting will be expected to take one to two months. All in all, this platform will be expected to graduate from public expenditure after six months.
Capacity Building programs will also be fee based so as to cover overhead costs like venue hire, audio visual equipment and stationary as well as fees for the trainers and presenters. Public finance will be required only for technical assistance and the hosting of the first program. Thereafter, the programs will be expected to be self sustainable. Post training cd’s, books and other presentations will be sold to those who were not able to attend the program or those who simply require their own copies for archiving. This will be an income generator for future program expenses.
Consultations with legislators in terms of reforming the regulatory framework will be done on a conference or forum basis. This will be an opportunity for established and up-coming companies to market their services. In essence, the costs of hosting of such symposiums will through sponsorships. Companies that sponsor the events will have the opportunity to advertise and distribute their promotional materials. This platform will not require public finance.
The establishment of a secondary capital market for SME will require a substantial input of public finance to cover first-loss capital. Extensive consultations will be required as well as substantial technical assistance. Ideally, all paperwork, regulatory framework as well as infrastructure and institutional set up is expected to be completed after one and half years. Thereafter, the market will become self sustainable just like any stock market.
At the present moment, it is quite difficult to estimate with a high degree of accuracy the timeframe it will take to graduate WiSnet from the reliance on public finance. This is due to the interconnected nature of the platform with regards to the sectors that it will target as well as the stakeholders who will be involved in the implementation of the solution especially on a global platform. A lot of protocols will have to be followed in different countries. The graduation and success of the solution will largely depend on the input of international bodies in terms of coordinating and providing expert knowledge on the ideal implementation criteria of the solution.
Demonstrate how your proposed solution will survive a potential loss of its largest private funding source
Private funding will be required for the initial start-up funding. The solution essentially requires a hybrid of public and private financing in the proportions of 90% and 10% respectively. Any loss of private funding will be cushioned by the input of the beneficiaries of the proposed solution. As mentioned in the response to question 19, services offered by the solution will be fee based thus ensuring sustainability of programs once they have been launched.
Please tell us what kind of partnerships, if any, could be critical to the greater success and sustainability of your innovation
Implementation of the proposed solution will include various stakeholders that are involved in the promotion of the development of the private sector with emphasis on SME.
National actors will generally include the chambers of commerce and industry and trade bodies. Chambers of commerce and industry will provide expect advice in terms of implementation of solutions as well as engaging in advocacy. Trade bodies will provide information on markets as well as the status of the various industries in a nation. NGO’s will provide independent advice and evaluations on solutions as well as their implementation.
Regional and international actors will involve COMESA, SADC, the World Bank and IFC. These actors will provide technical assistance and oversight of the solution.
Are there non-financial issues that could threaten the sustainability of your proposed solution?
The major factor that can potentially impede on the sustainability of the proposed solution is the politicization of developmental interventions especially in Zimbabwe. Over the past years Non Governmental Organizations’ and donor activities where hampered by interventions of the government. Prior to 2009 and the formation of the Inclusive Government, most NGO operations were almost non-existent. However, the Inclusive Government has brought some normalization to the operations of NGO’s. The solution implementers will endeavor to continuously engage the government and all interested parties in the implementation of proposed solutions.
Poor investor confidence is another disease that can hinder the sustainability of the proposed solution especially in Sub-Saharan Africa. This is exemplified by the poor flow of Foreign Direct Investment in the region. This can be partly attributed to the not so investor friendly regulatory framework. The Indigenization and Economic Empowerment law that is being enacted in Zimbabwe has impacted negatively on the flow of FDI at a time when the nation is prioritizing long term investment.
Legislators in Zimbabwe have also had the tendency to overlook innovative ideas in the name of ‘national interest’. The Finance Minister advocated for the granting of security of tenure for farmers reallocated so that they (farmers) can use the security to source financing from banks. Members of the opposition party heckled him without considering the impact of such an idea on the development of the economy.
Africa has been riddled with a poor communications infrastructure which can also hinder the access and flow information from developed countries to developing countries.
Please tell us if your proposed solution aims to scale up through a high growth sector, expand immediately to multiple sectors, and/or scale up geographically
The proposed solution intends expand immediately to other sectors as well as scaling up within each sector. Initial sectors are agriculture, tourism, agro-processing and manufacturing, services and finance. Generally, Africa has a comparative advantage in agriculture and mining therefore the solution intends to exploit this advantage by having a bias towards these sectors.
The solution intends to springboard from the advantages that have been exploited by Youth Business Forum so as to further expand the solution into other provinces. Once the local Zimbabwe market has been exploited, the solution will expand into the southern African region later on expanding into the Sub-Saharan Africa region ultimately growing to encompass the global SME market.