Eligibility Criteria
Not dependent on government decision-making: Projects must not be dependent on outstanding government decisions of a strategic, financing or judicial nature to proceed. This does not refer to normal administrative decisions, such as the issuing of business licenses.
For-profit enterprises: Applicants must be for-profit enterprises or consortia led by for-profit firms with proven capacity to implement the proposed project.
Matched funding: The applicant firm must share risk with the fund through the provision of a matched contribution, in cash or in kind.
Focus on the rural poor: Projects must directly or indirectly benefit substantial numbers of low-income persons.
Assessment Criteria and their Weighting
- Commercial viability (20%): Projects must establish or expand commercially viable business models. Applicant firms which can demonstrate market share (customers, orders, contracts) but are unable to supply these markets because of once-off barriers to entry or once-off transactions costs will be favourably considered. Furthermore, applicant firms must demonstrate their capacity to implement the project.
- Potential pro-poor impact (20%): The number of people or communities positively affected by the project is central to the selection criteria of the challenge fund. Projects with the potential to generate notable benefits in the form of increased employment, higher incomes, training, increased market access or systemic change within the market or region will be favourably considered in the project selection process. Preference will also be given to projects focused on rural areas or in South Africa's designated urban poverty nodes.
- Ability to measure the impact of the intervention (20%): the extent to which the application contains realistic and measurable targets (preferably based on previous experience of sound projects) is important. The detail of the applicant's monitoring and evaluation plan will be scrutinised to assess the extent of its operational effectiveness. Importantly, measurable indicators of impact must be seen within the duration of the contract (i.e. at most 18 months), even though the full impact of the initiative may only be measured beyond the term of the contract.
- Potential for replication, sustainability and/or systemic change (20%): The degree to which projects are likely to lead to longer term impacts beyond the duration of the challenge fund's support is highly valued. Longer term impact could be in the form of the sustainable scaling-up of project activities, the replication of projects by other institutions, the long-term removal of barriers to markets, or the sustainable continuation of the project by securing funding from other sources or by sufficient revenue generation for the project to become self-sufficient.
- Extent of matched funding (10%): A minimum of 1:1 own contribution in cash or in kind is required. Commitments in excess of this requirement will score higher points under this criteria. In general, the challenge fund will avoid financing fixed investments or long-term operating costs.
- Innovation (10%): Projects must be innovative in nature, or take existing small-scale or pilot initiatives or innovations to scale. Innovation is defined as the introduction of new products or services, business or organisational models, production methods, delivery or service methods to a market or geographic area where these have not previously been applied, although they may be used in other markets.
