By Yinka Kolawole, with agency report

Small businesses generate a lot of employment, improve local technology and produce many products and services that support larger companies and industries. Because of the important roles they play in economic growth, many governments and international organisations set up several grants and loans to support small and medium scale enterprises (SMEs) in Africa.

Applications for these grants and loans are usually free, but not many people know about these opportunities or even bother to apply for them. Some of these include: African Guarantee Fund (AGF), United States African Development Foundation (USADF), and African Enterprise Challenge Fund (AECF), among many others.

USADF

The United States African Development Foundation (USADF) was established with a unique mission to by-pass layers of government inefficiencies by working directly with the most needy communities in Africa. Its programs respond to local project requests by actively engaging the local community group or enterprise in the design and implementation of the projects. This ensures that outcomes best address the real community needs.

The core operating principles of the Foundation include: Focus program activities on marginalized communities in Africa; Invest in Africans and their ideas through participatory development; Ensure projects produce long term social and economic results and; Promote African led and managed field project support. Others are: Achieve the highest levels of openness and transparency; Support and develop an equal opportunity, results driven staff that rewards hard work, dedication to the mission, and personal success; and Model high effectiveness and low overhead operations.

USADF grant is available to entrepreneurs in more than 19 African countries, including Nigeria. It provides funding to small-scale agricultural producers, small and medium-sized businesses and community-based organisations. Applications are free and very straightforward. It supports African-led development that grows community enterprises by providing seed capital and technical support. This empowers those who are least served by existing markets or assistance programs to become a part of Africa’s growth story.

The Foundation works with small holder farmers; youth; women and girls; and communities recovering from major crisis. It works by building a network of African expert support providers; identifying community enterprises with potential; providing an integrated package of support and; managing for results

Eligibility

USADF provides funding for the following types of groups: Agricultural Cooperatives and Small-scale Producer Groups – Organizations formed by a group of small-scale farmers, artisans, or producers to achieve some or all of the advantages of large-scale marketing and production. Community-based Oganizations (CBOs) – Organizations made up of a group of people who come together to accomplish a common goal or a set of goals tailored to meet the development needs of their community.

African Intermediary Organizations (AIOs) – Organizations that work directly with very low-income people and underserved groups. The majority of USADF’s funding agreements range between $50,000 and $250,000. Application for grant is free, there is no fee associated with grant application, and should be directed to USADF Country Representative.

USADF has two major priorities when considering request for funding a project: Does the application come from an African community group or organization that represents its own development priorities and includes the participation of the poor in setting project objectives? Does the application represent a project that could provide maximum benefit to an underserved and underserved population group?

Project applications are evaluated on the basis of potential benefits to the community, potential for job creation, workers income improvements, long term profitability, and managerial strengths and capabilities.

Organisation requirements

The organisation must be 100 percent African-owned and managed. It must be a legally recognized African entity (or in the process of becoming legally registered. Registration must be completed before any funding may be provided). It must demonstrate that it has successfully worked together and has the potential to productively utilize development funds.

The ownership and management must be in agreement on the problem to be addressed and have a commitment to benefit their community. The organisation must have basic functional management and controls to use and account for USADF funds.

Benefit requirements

The proposed project should represent both the applicant’s and targeted beneficiaries’ identified needs. The outcome of the project must provide real (measurable) benefits to the community. Benefits include job creation, increased incomes levels, improved market access, and quality of life improvements.