Fund dangles $2 million for financial sector boost

post was last updated: July 12, 2019

By William Kumwembe:

Malawi Innovation Challenge Fund (MICF), a competitive grant mechanism for businesses to finance innovative projects, Thursday unveiled a $2 million fund to support financial sector development in the country.

The MICF total fund size stands at $20 million from the initial $8 million at the start of the project in 2014.

The fifth round of the window is targeting for-profit organisations, commercial banks, microfinance institutions, and non-bank financial institutions registered in the country.

The business idea must be implemented in Malawi, either by private sector organisations registered in Malawi or externally registered businesses investing in the country.

A total matching grant requested must range between $200,000 and $700,00.

Projects applying for the MICF Finance window are expected to develop profitable models in Malawi that will introduce products, delivery channels and business models to increase financing to all small and medium enterprises (SMEs).

Addressing business operators and journalists at the launch of the new window, MICF Project Director, Buddhika Samarasingh, said the initiative was aimed at empowering the sector for sustainable growth.

“Most of the financial sector investment has been going to large corporates and to government debt, obviously that is getting rebalance but the financial sector is quite liquid at the moment. We are hoping that this kind of instrument will allow them to look at new possibilities,” Samarasingh said.

The project is being funded by the United Kingdom (UK) through United Nations Development Programme and the UK aid.

British High Commission Malawi Chargé d’Affaires, Gary Leslie, said the window was targeting financial institutions and encourages them to work with a segment of credit-worth SMEs that have potential to deliver growth and jobs.

He said the window would leave a legacy for MIFC as they will not only develop a deep pipeline of business ideas but also help establish an eco-system to support investment in inclusive business models.

“This will then help others replicate and continue the path towards more inclusive, shared growth for Malawi.

“It is our hope that this window will add to the already impressive list of innovations seen in the inclusive business models that the MIFC has already supported in Malawi,” Leslie said.

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

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