Our Evaluation Process
Regardless of whether the project proposal is submitted in response to a Call for Concepts or not, there are two parallel processes that all grant applications go through:
1. Proposal evaluation
The proposal evaluation process comprises two steps:
First, a concept note (a template will be provided) will be completed by each applicant. Shortlisted concepts will be invited to complete a full project proposal (a template will be provided), which is the basis for the final funding decision.
Second, Prospero Grant Selection Committee will provide support and guidance to applicants throughout the process and will be able to advise applicants on the chances of their application being successful and on ways in which the proposal can be strengthened in order to increase the chances of success. The Committee will also inform applicants if their concept is unlikely to attract funding, avoiding the applicant wasting time and effort on preparing a proposal that does not fit the Prospero strategy or funding priorities.
2. Due diligence assessment
The due diligence assessment comprises three steps:
First, we establish eligibility and undertake important vetting checks (against international databases of excluded organisations and using standard internet searches to ensure that there is nothing about the applicant that would prevent Prospero from entering into an intervention partnership).
Second, we ask all applicants to complete a compliance self-assessment and declaration.
Finally, we undertake a delivery risk assessment that looks at the potential partner’s capacity to deliver the proposed project.
The proposal evaluation and due diligence processes are completed in parallel and typically take anywhere from 4 to 6 weeks to complete, depending on the complexity of the proposed project and the ability of the applicant to respond to Prospero’s application requirements.
The final funding decision rests on the findings from both the proposal evaluation and the due diligence assessment. Like any investor, Prospero wants to be sure that we are investing in a viable project that is likely to deliver the claimed commercial and developmental returns and working with a partner who is capable of and committed to delivering the project, is eligible for Prospero funding and is of good-standing.
View Diagram Here
Prospero considers three issues in relation to all project proposals:
1. Strategic congruence
We want to be sure that the proposed project is at the intersection of both the applicant’s commercial objectives and Prospero’s development objectives. We do not fund projects that are designed to deliver development returns in the absence of an underlying sustainable, commercially viable business objective. The best project proposals are those where achieving the development objective is a natural result of achieving the commercial objective.
2. Sustainable market change and impact at scale
We want to be assured that the project will make a real difference for the Zambian SMEs that we want to see grow.
To determine sustainability we look at the commercial aspects of the proposal:
- How the project fits with the applicant’s existing business. We pay a lot of attention to the applicant’s management and financial capacity to deliver the project successfully (taking into account the support requested from Prospero) and to manage the new business.
- Is the project commercially viable – will it deliver the profitable growth for the applicant that is critical for sustainability? We also look at financial viability – can the applicant finance the investment required to complete the project and the additional working capital necessary to run the expanded business?
To determine impact at scale, we look at the development aspects of the proposal:
- Which SMEs will benefit from the project, where are they and how many are there? We look at how they will benefit – which of the Five C’s to successful market participation will the project address and what growth opportunities will the project create? We want to understand the distribution of the potential benefit – how important are the target SMEs to the commercial success of the project?
- We want to understand the scalability of the innovation. How widespread is the problem that the project is addressing, and how can the project be expanded beyond the intervention partnership?
3. Value for money
Finally, we assess whether the anticipated development returns justify the amount of co-investment that the applicant has requested. We go through the project budget carefully to decide whether all of the costs are allowable, necessary and reasonable. We want to be sure that the budget does not go beyond the initial investment required to get a commercially viable project off the ground. Prospero does not contribute to the operating costs of a project that will struggle to survive without ongoing subsidy.
We are particularly interested in supporting early-stage or more mature businesses that are embarking on a clear path to growth and are interested in the possibility of attracting external impact investment at some point in the future.