Innovation Partnerships in Business Services

Call for Concepts
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OVERVIEW

Prospero’s Business Services sector works with intervention partners to address identified market constraints that inhibit sector growth and competitiveness. These constraints include:

Capital:

Businesses lack access to affordable capital which allows them to participate in the market.

Connections:

Poor business linkages is one of the reasons that businesses struggle to move to the next level of growth.

Capacity:

SMEs often lack governance, financial management and marketing capabilities and are therefore unable to transact with larger companies.

Compliance:

Businesses do not always understand the market rules that are necessary for full participation.

Culture:

Large companies generally prefer to maintain their existing supplier relationships and, as a result, end up overlooking up-and-coming businesses with great potential for growth.

Prospero is seeking concepts for the following initiatives: 

1.     Rural Enterprise Hubs

Prospero is looking for partners to support the scale-up of commercial hubs in rural areas.  Our aim is to see commercially viable solutions that increase access to products and services for rural communities and create entrepreneurial opportunities and increased economic activities in these areas.

The following questions may be useful in helping to develop your investment concept:

  • How can rural communities have greater access to green energy sources and associated technology?
  • How will the proposed project commercialise distribution of products and/or services in rural areas?
  • How will the proposed project create jobs and entrepreneurship opportunities for individuals in rural areas?
  • How will the proposed project increase access to mobile phones, computers, financial services (including mobile money), MFIs, and banks.
2.     Business Linkages

This initiative focuses on addressing barriers to market entry for the majority of SMEs in Zambia. Many large corporations prefer working with the same suppliers’ which can impede new businesses from gaining access to these markets. Through this initiative, Prospero is seeking innovative solutions that can improve transactions between large companies (buyers) and small companies exhibiting growth potential.

Prospero is therefore looking for concepts that will take the following into consideration: 

  • The introduction or expansion of an online platform or other innovative ideas that will increase transactions between SMEs and large buyers.
  • The partner should describe in their concept what approach will be used to build SME capacity to make them more competitive in their respective markets.
  • The partner should describe how they will work with large companies to increase their interest to transact with smaller companies.

The following questions may be useful in helping to develop your investment concepts:

  • What are the challenges small businesses face in trying to enter into larger markets?
  • How can the number of business transactions between larger established companies and smaller companies be increased? What solutions are you proposing to help local businesses better access markets?
  • Are there any areas of capacity building that local businesses require to become more competitive? How can they access these capacity building services in a sustainable and cost-effective manner?
  • There have been many business linkage initiatives in the past; what are you proposing that is different? What are the expected results? How will your proposed interventions be sustained in the long term?
3.     Specialized Services

Prospero is looking to partner with organisations/companies that provide specific business solutions that SMEs across Prospero focus sectors – Food and Agriculture, Tourism, Mining and Mining services – can access to help grow their business. These solutions include (but are not limited to) transport and logistics, information technology and/or research solutions that will enhance business operations.  For example, a potential partner could develop a transport and logistics solution that will improve the ability for farmers in the legume sector to access international markets.

The following questions may be useful in helping to develop your investment concepts:

  • What current market system constraints exist within the Prospero focus sectors (Food and Agriculture, Tourism, Mining and Mining services) and how can these challenges be addressed through innovative business solutions?
  • How can SMEs within our focus sectors improve their product offering to make them more competitive on the market and what interventions should be put in place to ensure that there are no barriers to market entry?
  • What solutions can help address SMEs access to information that will help them make informed business decisions such as what markets to penetrate, what products or services to launch, and how to undertake business expansion?
  • How can collaboration between SMEs and other service providers be improved?

CRITERIA

Prospero provides financial and/or technical assistance support to private sector companies willing to co-invest in innovative and scalable solutions that:

  • address key sector constraints and can attract commercial investment.
  • improve climate resilience and encourages business growth through inclusive business models (focus on women and youth) within each of the three sub-sectors.
  • promote partnerships between existing and new business organisations and hubs in specific geographic areas to achieve scalable business growth and create a competitive business environment with significant development impact.
  • create and/or sustain quality jobs and income opportunities for low-income Zambians and/or marginalized populations (women, youth, people with disabilities and rural populations).

Competitive project submissions should be built on the following criteria:

  • Projects should be both commercially and sustainability-oriented to ensure applicants’ commitment to the partnership.
  • Applicants should display sufficient capacity (technical, managerial and financial) to implement the proposed project successfully.
  • Proposed projects should clearly address at least one of the business services sector constraints in a logical and evidence-based way. The project does not need to necessarily address every constraint, but it needs to be clear which market challenges are being faced by SMEs.
  • Projects should introduce some level of innovation – new interventions, service or business model – that will help address the business services sector constraints.
  • Provided all criteria are met, projects that are likely to deliver greater outcomes and in which the partner(s) contributes a larger proportion of the total project budget will be more competitive for funding. This will be assessed and judged internally by the Prospero team.
  • Provided all criteria are met, applicants that are able to leverage additional funds – the applicants’ own contributions and/or third-party funds – will be viewed favourably.
  • Projects that are likely to generate benefits for women, youth, disabled persons, and /or rural populations are strongly encouraged.
  • Projects that positively contribute to increased access to finance and/or climate change mitigation/ resilience/adaptation are also encouraged.
  • Applicants should be able to demonstrate existing and relevant experience regarding their proposed project and possess relevant and valid trading licenses and/or permits.
  • All proposed projects should have a maximum duration of 18months. There is no minimum duration.

Prospero is looking for innovative, high-impact projects that will benefit relatively large numbers of Zambian individuals and MSMEs. Competition for funding is likely to be high, so be advised that only those projects that meet most of the selection criteria, provide the best value-for-money and have a high-impact will be considered. Funding is not guaranteed.

GRANT FACILITIES

Prospero’ grants are both cost-sharing and reimbursable. Any financial contribution we make towards a proposed investment project is limited to a maximum of 50% (with one or two very specific exceptions) of the assessed ‘eligible project budget’. All grant awards will be inclusive of applicable taxes and will be paid in either ZMW or GBP.

What does ‘cost-sharing’ mean?

Cost-sharing requires potential grantees and, if relevant, other third-party organisations to share the costs of project implementation with Prospero. A cost-share is a portion of the total project costs that will be paid by the grantee and includes all contributions, both cash and in-kind (excluding in-kind labour), that a grantee makes towards a project. Funding sources will need to be clearly stated in the budget.

For successful applications, Prospero’s grant contribution to the overall project budget will be assessed according to the quality of the proposal and the grantees capacity and ability to invest their own funds and/or resources. The final grant amount will depend on the nature of the project, negotiations with Prospero and the successful verification of all contributions. In all cases, Prospero will want to leverage as much partner contribution as possible so please be realistic as you develop your proposed project budget. Prospero is unlikely to fund any project with no partner contribution.

What does ‘reimbursable’ mean?

Although Prospero provides up to a 50% financial contribution towards a proposed project, this amount is not provided upfront, but is instead reimbursed to grantees throughout the course of the project, subject to the achievement of mutually-agreed upon milestones. These reimbursements will be made according to an agreed payment schedule (which will be stated in the contract) and only after the grantee has submitted sufficient documents to verify expenses. Potential grantees are expected to have the capabilities to fund project activities upfront, for which they will be reimbursed by Prospero, and must demonstrate a stable financial history.

Types of grant facilities available

The following grant facilities are available under the Business Services sector:

Grant Facility Description
Technical Assistance Prospero contributes to a partner’s costs of accessing specialist technical expertise during the design and/or implementation of the project.
Business Innovation Prospero contributes to projects that have identified innovative commercial opportunities in order to incentivise investment in innovation and offset some of the associated risks.
Grant facility amounts
Grant Facility Prospero contribution (Indicative range)
Technical Assistance only

£5,000 to £50,000

 

Please contact Prospero prior to submission for proposals outside of the indicative range.

Business Innovation (this can include some technical assistance)

£5,000 to £100,000

 

Please contact Prospero prior to submission for proposals outside of the indicative range.

BUDGET PREPARATION

Please keep in mind the following when preparing your budget:

Allowable Expenses Reasonable and actual costs related to project implementation, not including those in the Unallowable List. Vehicles are only allowable in very specific circumstances where need is clearly justified, and other transportation options are not reasonable or do not make commercial sense. Prospero retains the right to decide which of the costs are allowed.
Unallowable Expenses Purchase/rent of land or property, medicines not appearing on WHO’s Essential Drugs List, CFCs, pesticides with persistent organic pollutants banned by the Stockholm Convention, anything related to tobacco production, luxury goods, or military/security equipment or services
Value for Money Please keep in mind strict value for money principles as you develop your project budget. Include only costs relevant to implementation of the proposal project.
Eligible project costs
Project Set-up Costs Allowable expenses incurred to start-up the project such as technical assistance costs, input costs, installation costs, training, etc.  
Project Capital Expenditure Total amount of funds required by the company to acquire or upgrade fixed assets (such as buildings, equipment) or upgrade land/property. This excludes vehicles except in very specific circumstances.
Project Operations Total amount of funds required by the company for day to day operations such as advertising, branding, etc.
Other Allowable Costs Any other allowable expenses that are necessary for project implementation but do not fit into the above categories.
Note on Labour Outside short-term expert technical assistance, labour costs are unallowable. Prospero will not subsidise general labour costs.
Note on Business Services Prospero does not pay temporarily for business services that can be provided by the market or subsidise businesses that should be operating on a commercial basis.

 

ELIGIBILITY AND APPLICATION GUIDELINES

Who can apply for a grant from Prospero?

Registered and tax-compliant for-profit organizations are eligible to apply. Individuals are not eligible.

All applicants must meet three basic conditions:

  • Zambian registered legal entity: All applicants must be registered with the appropriate authority as a legal entity in Zambia.
  • Tax registered and compliant: All applicants must be able to demonstrate that they are registered for tax and are in compliance with tax obligations.
  • Authorised business activity: All applicants must possess any relevant sector licenses or permits for their proposed business project.
  • Post-revenue: All applicants must be post-revenue and have a minimum trading history of 2 years. *If your organization has been operational for less than two years, but is post-revenue and your proposed project fulfills all other criteria, then email us at [email protected] for further consideration.
How to apply

Step 1: Interested applicants should fill out the form below in full.

Step 2: After the form has been submitted, applicants will promptly receive an email containing further application instructions, including templates to be completed.  If the email does not appear in your inbox, please check your spam or junk folder.

Please take note of the following:
  • Concepts will be accepted on a rolling basis starting from 28 August 2020 and ending on 31 October 2020. Concepts will be reviewed on a first-come, first-reviewed basis.
  • Prospero reserves the right to close the grant facilities at any time. Please follow our social media pages for updates in the event this occurs:
Facebook: @prosperozm
Twitter: @prosperozm
LinkedIn: Prospero Zambia

  • Prospero will review each application and feedback will be provided to all applicants. Concept submissions that do not include ALL required documents WILL NOT be reviewed. Prospero’s decisions on concept applications are final.
  • If a concept submission is successful, the applicant will be invited to submit a full proposal. Further guidance on the proposal submission process will be provided at this stage.

Complete the form below to receive application instructions

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