Pull the SME sector from the dustbin (Part 3)
Ndatulumukwa Haikali writes:
Grants and funding incentives are essential to promote SMEs.
In the world of startups, Namibia can have a good reputation of having the best setups to help establish and grow new businesses in the region.
The country's position will be based on a lot of factors, including location, which will provides great access to some of most powerful emerging and current economic strong houses. But one of the most compelling reasons is the amazing amount of support that the Namibian Government can offer to businesses by using internationally recognised models of support.
The best strategies the government can effectively use to fund small businesses are cash grants, incubators and equity finance schemes.
CASH GRANTS
These grants are popular and can offer financial assistance under different conditions for startups.
The Action Community for Entrepreneurship (ACE Startups Scheme) needs to be administered by SME training institutions like SMEs Compete and Team Training and Management.
Eligibility: First-time Namibians or Permanent Resident entrepreneurs, based on criteria that include differentiation, business model feasibility, potential market opportunity and management team.
How: For every $3 you raise, ACE will match you with $7 up to $50,000. So if you raise $21,429 by yourself, ACE will give you the maximum of $50,000.
INNOVATION AND
CAPABILITY VOUCHERS
ICVs are usually the first and easiest government funding for Namibians startups.
Eligibility: Any SME registered and operating in Namibia.
How: ICV provides a cash-equivalent voucher worth $5,000 to develop startup capabilities.
CARE ENTERPRISE FUND
A fund similar to the ComCare Enterpise Fund can be administered by the Ministry of Poverty Eradication and Social Welfare, providing seed funding for social enterprise startups that employ disadvantaged locals.
Eligibility: Social enterprise startups that hire and train disadvantaged persons.
How: For the first two years funds a maximum of 80% of capital expenditure and operating costs of up to $300,000.
CAPABILITY DEVELOPMENT GRANT
The CDG is a financial assistance scheme that helps startups build capabilities in ten business areas including consultancy, certification and equipment costs, and training.
Eligibility: Any SME registered and operating in Namibia.
How: Startups can get up to 70% of productivity and capability activities covered for a maximum of $30,000.
TECHNOLOGY ENTERPRISE
COMMERCIALISATION SCHEME
The TECS has the largest cash grant and helps support startups with strong technology Intellectual Property as well as a scalable business models.
Eligibility: Rigorous standards for the solution (clearly demonstrate the science, be a breakthrough, build on IP, and be commercially viable) and be registered in Namibia for less than 5 years.
How: Two-tier grant - Proof of Concept at $250,000 and Proof of Value at $500,000. Usually startups apply for the POC and then POV for a total of $750,000.
PRODUCTIVITY AND
INNOVATION CREDIT
The PIC scheme is part cash payout and part tax benefits for companies to increase their productive and innovation abilities.
Eligibility: Any SME registered and operating in Namibia with three local employees.
How: Startups can choose to get a cash payout up to $100,000 or tax benefits of up to $400,000 to spend on R&D, IT, or staff training.
Grants and funding incentives are essential to promote SMEs.
In the world of startups, Namibia can have a good reputation of having the best setups to help establish and grow new businesses in the region.
The country's position will be based on a lot of factors, including location, which will provides great access to some of most powerful emerging and current economic strong houses. But one of the most compelling reasons is the amazing amount of support that the Namibian Government can offer to businesses by using internationally recognised models of support.
The best strategies the government can effectively use to fund small businesses are cash grants, incubators and equity finance schemes.
CASH GRANTS
These grants are popular and can offer financial assistance under different conditions for startups.
The Action Community for Entrepreneurship (ACE Startups Scheme) needs to be administered by SME training institutions like SMEs Compete and Team Training and Management.
Eligibility: First-time Namibians or Permanent Resident entrepreneurs, based on criteria that include differentiation, business model feasibility, potential market opportunity and management team.
How: For every $3 you raise, ACE will match you with $7 up to $50,000. So if you raise $21,429 by yourself, ACE will give you the maximum of $50,000.
INNOVATION AND
CAPABILITY VOUCHERS
ICVs are usually the first and easiest government funding for Namibians startups.
Eligibility: Any SME registered and operating in Namibia.
How: ICV provides a cash-equivalent voucher worth $5,000 to develop startup capabilities.
CARE ENTERPRISE FUND
A fund similar to the ComCare Enterpise Fund can be administered by the Ministry of Poverty Eradication and Social Welfare, providing seed funding for social enterprise startups that employ disadvantaged locals.
Eligibility: Social enterprise startups that hire and train disadvantaged persons.
How: For the first two years funds a maximum of 80% of capital expenditure and operating costs of up to $300,000.
CAPABILITY DEVELOPMENT GRANT
The CDG is a financial assistance scheme that helps startups build capabilities in ten business areas including consultancy, certification and equipment costs, and training.
Eligibility: Any SME registered and operating in Namibia.
How: Startups can get up to 70% of productivity and capability activities covered for a maximum of $30,000.
TECHNOLOGY ENTERPRISE
COMMERCIALISATION SCHEME
The TECS has the largest cash grant and helps support startups with strong technology Intellectual Property as well as a scalable business models.
Eligibility: Rigorous standards for the solution (clearly demonstrate the science, be a breakthrough, build on IP, and be commercially viable) and be registered in Namibia for less than 5 years.
How: Two-tier grant - Proof of Concept at $250,000 and Proof of Value at $500,000. Usually startups apply for the POC and then POV for a total of $750,000.
PRODUCTIVITY AND
INNOVATION CREDIT
The PIC scheme is part cash payout and part tax benefits for companies to increase their productive and innovation abilities.
Eligibility: Any SME registered and operating in Namibia with three local employees.
How: Startups can choose to get a cash payout up to $100,000 or tax benefits of up to $400,000 to spend on R&D, IT, or staff training.
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