DFID, KFW and UNDP Pull Resources to Support Second Round of the Malawi Innovation Challenge Fund (MICF)

Jul 14, 2016

Entrepreneurs listening to a presentation at the launch of the manufacturing & logistics, and the agribusiness windows of MICF in Blantyre, July 12, 2016

The UK Department for International Development (DFID) and the Federal Republic of Germany through  KfW  have joined hands with the United Nations Development Programme (UNDP) to support the second round of competition of the Malawi Innovation Challenge Fund (MICF) for the  Manufacturing and Logistics, and the Agribusiness Windows.

The Malawi Innovation Challenge Fund (MICF) is a competitive, transparent mechanism that provides grant finance for innovative, inclusive business projects proposed by the private sector active in Malawi.

Speaking to representatives of the private sector which included the president of the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) in Blantyre at the launch of the two MICF Windows, Growth and Resilience Team leader and Acting Head of Office for DFID in Malawi, Rachel Perrin said the Agribusiness Window that DFID is supporting in the second round of the MICF is designed to bring real impact, both in terms of attempting to change market systems and increase employment and incomes of the poor.

Perrin said the introduction of new technologies and practices that are based on commercial opportunities, and driven by the private sector has the ability to transform smallholder agriculture to meet these challenges and provide a step up to an agribusiness sector to deliver greater value-added products and services.

On her part, Christine de Barros Said, Deputy Head of Development Cooperation at the German Embassy said although the concept behind MICF is new to the German-Malawi Cooperation it is innovative and holds significant potential to scale and embrace new thinking.

She said the support that KfW is providing to MICF on the Manufacturing and Logistics Window marks an important step in supporting Malawi’s pursuit of inclusive private sector development that broadens its exports base and ensures that more Malawians benefit from economic growth.

“By providing the risk capital to allow companies to link small and medium farmers and other enterprises to formal or structured market channels, we believe this will provide access to higher value markets and lead to increased incomes,” noted Said, adding that the Challenge fund contributes to private sector development in rural areas which is one of the key pillars of the German-Malawian Cooperation programme.

Said added that Germany’s support to the Manufacturing and Logistics Window of MICF will go a long way in helping the agriculture producers in delivering inputs, collecting produce, providing post-harvest, processing and ultimately distributing to both local and international markets.

UNDP Deputy Resident Representative for Operations, Ms. Katarzyna Wawiernia, commended the governments of Germany and United Kingdom for their financial support to the two MICF windows, saying the support will contribute to both private sector development and poverty alleviation in Malawi.

Wawiernia said experiences from the first round of the MICF demonstrated that there is a resilient and emerging private sector in Malawi with capacity to innovate and evolve despite the country’s challenging economic environment.

“We hope the launch of the two windows will continue supporting the growth of progressive and innovative businesses which will take a hard-headed, business-oriented approach to the critical issue of ultimately benefitting the poor,” said Wawiernia.

The first round of MICF in Malawi was launched in 2014 with support to 10 projects which have already started impacting lives of thousands of poor households and creating hundreds of jobs in the process. The agriculture window is supporting five projects in the livestock, horticulture, tea, ICT and groundnuts that will increase the incomes of 11,800 poor households and will create almost 300 jobs; whilst the manufacturing window is supporting also five projects in processed agricultural products, low cost water filters, milk products that will improve the lives of 21,500 households, create 850 jobs and impact on 20,000 consumers.

The total MICF Grant request for the first round of competition amounts to US$ 5.3 million whilst the contribution from companies amounts to US$ 8.6 million which is quite substantial.

One of the attendees, Haroon Mia who runs a dairy farm at Zalewa in Blantyre rural expressed optimism that many poor people will benefit from the MICF support, especially those that have no access to markets for their products. On his part, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Karl Chokotho applauded the Fund saying it has potential to turn around the economic growth of the country.

Under the second round of MICF, the Agribusiness Window seeks to increase the supply of processed and semi-processed agricultural commodities produced by poor producers in Malawi. The Manufacturing and Logistics Window, on the other hand, seeks to work with companies to backward integrate their processes to incorporate locally produced products and services to reduce reliance on imported goods. It will also support the export of manufactured goods and support improvements in the efficiency of the distribution and logistics sector.

For more information on how to apply consult the MICF website on www.micf.mw

For further information contact: Cinzia Tecce, Private Sector Development Specialist, cinzia.tecce@undp.org, +265 999 504 275