One of the challenges facing entrepreneurs or intending business owners in Africa is the lack of access to capital. Of course anyone can start small but some business ideas require some bit of capital, no matter how small, to get it off the ground and have a chance at success.
Asides sources of business funding like loans, investments etc there is one you can take advantage of as a budding African entrepreneur – grants.
What are Grants
Grants are usually non-repayable funds gifted by one party (usually government, non profit organisations, foundation or corporation) to a recipient who may be (but not at all times) a non-profit entity, educational organisation, business or an individual.
Thus business grants are non-repayable funds or other forms of support (financial or non financial) given to a receiving organisation or business to help it get its products/services to the market, expand or grow as the case may be.
So basically the idea of a business grant is to help the receiving business further their business goals or objectives.
Why Grants Can Be an Option for Your Business
Whether you are at the idea, product stage or already generating some revenue, grants can be a smart way to get the needed funds to grow your business.
Businesses that may need or be better suited to grants include;
- businesses that can not easily be funded by angel investors or venture capital (eg small scale businesses that may not be very easy to scale to millions of dollars in revenue)
- businesses that cannot take on debt funding (ie loans). Not every business owner is in a position to take business loans. Taking loans sometimes require conditions such as certain level of revenue, providing collateral etc which may be out of the reach of the average African entrepreneur
If you cannot take a loan, get investment for your business, then searching for and getting a grant could be the much better option for your business.
Sources of Grants for African Entrepreneurs and Business Owners
- Tony Elumelu Foundation Entrepreneurship Program: This entrepreneurship grant and training program founded by African billionaire and banking tycoon, Tony Elumelu, offers funding, training, and mentorship to African entrepreneurs. The application process is competitive, but successful applicants can receive up to $10,000 in seed capital. The Tony Elumelu Foundation Entrepreneurship Program has run since 2015 and has been the source of grants to thousands of business owners and entrepreneurs in Africa.
- African Development Bank Group: The bank offers various funding programs, including the Youth Entrepreneurship and Innovation Multi-Donor Trust Fund, which provides grants to youth-led businesses in Africa.
- Agence Française de Développement (AFD): AFD offers funding for small and medium-sized enterprises (SMEs) in Africa through its Proparco subsidiary. The funding is primarily focused on sustainable development.
- United States African Development Foundation (USADF): This organization offers grant funding to African entrepreneurs through its All Africa Business Development Competition. The competition is open to businesses in various sectors, including agriculture, energy, and healthcare.
- GrowthAfrica: This organization offers seed funding, mentorship, and training to African startups. The focus is on businesses with a social impact.
- The Seed Transformation Program: This program is run by the Stanford Graduate School of Business and provides funding and training to high-potential businesses in Africa.
- The African Women’s Development Fund (AWDF): This organization offers grants to African women entrepreneurs through its AWDF Grants program. The program provides funding to businesses in various sectors, including education, health, and agriculture.
- The Shell LiveWIRE program: This program provides funding and support to young entrepreneurs in Africa. The focus is on businesses in the energy sector.
- The Mastercard Foundation: The foundation offers funding and support to young entrepreneurs in Africa through its Young Africa Works program. The program is focused on businesses in the agriculture and hospitality sectors.
- The African Entrepreneurship Award: This program offers funding and mentorship to African entrepreneurs with innovative business ideas. The focus is on businesses that can create jobs and have a social impact.
Some of the grants are announced annually while for others there are no specific time for new grants.
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