Fund dangles K4bn grant to local firms


Malawi Innovation Challenge Fund (Micf), a competitive grant mechanism for businesses to finance innovative projects, has unveiled a five million euros (about K4 billion) fund to finance innovations in exports and import substitution in the manufacturing sector.

This is the fourth competition window round since the Micf’s inception in 2014 when 11 projects—six in agribusiness and five in manufacturing—were given a matching $8 million (about K5.8 billion) by the United Kingdom’s Department for International Development (DfID).

A cross-section of participants following proceedings at the launch

The grants seek to deliver basic social dividends that poor Malawians can afford and use the power of commercial enterprises to drive poverty reduction in Malawi. It is jointly backed by the United Nations Development Programme (UNDP), DfID and German government’s development fund (KFW).

In July 2016, KFW contributed three million euros (about K2.5 billion) competition’s second window on manufacturing and logistics, while another $2.5 million (about K1.8 billion)was for the first quarter of 2017.

Speaking in an interview after the launch in Blantyre on Friday, Micf project director Buddhika Samarasinghe

said his firm is impressed with Malawian businesses.

He said: “We have 18 projects looking at impacting over 40 000 poor households in Malawi. We are generating over a thousand jobs and having opportunities for the 20 000 poor income households to access products they would not normally have been able to access.”

In his remarks, Germany Ambassador Jurgen Borsch said the fund is a powerful springboard  for having speedy start of small and medium enterprises with innovative ideas that cover vulnerable members of society such as the youth and the poor.

“We have seen a lot of [investment] efforts in the last years, but unfortunately the impact has been limited compared to regional benchmarks around Malawi,” he said.

On his part, UNDP portfolio manager for Resilience and Sustainable Growth, Andrew Spezowka, said the fund’s role is to help companies bring new innovations that can step up implementation of Malawi Growth and Development Strategy (MGDS) and help them recognise that adequate financing plays a critical role for any business.

He said: “Innovation appetite in Malawi’s private sector is much higher, notwithstanding the constraints that the private sector feel in Malawi”

The two inaugural windows were expected to create about 11 000 jobs and benefit 33 300 poor households, according to Micf.

The target for the first initiative alone in 2014 was to create 3 300 jobs, but only 1 100  jobs were created with 250 in manufacturing and 850 in agribusiness.

The Micf demands grantees to cover 50 percent of the project cost and total grant funds requested must be between $250 000 (about K183 million) and $850 000 (K623 million).

To access the fund, a business has to submit a six-paged project concept note and answer questions about their business idea.

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