A KEY ingredient for a viable modern enterprise development continuum model is a seed funding mechanism.

It is a given that a developing country like Zimbabwe does not have adequate funding mechanisms for enterprise development. When it is available, it is often too expensive with some of the local banks having interest rates as high as 30%.

Seed funding on its own will not deliver the desired outcome. There are some key questions which needs to be asked particularly for a country with low levels of fiscal and budgetary support. Some of the questions would include who to fund for the greatest bang on the limited dollar; where to fund; how to fund and when to fund.

I read recently that the Ministry of Science and Technology has started advertising for the uptake for the commercialisation of new innovations. The ceiling of US$20,000, while not adequate for sizeable projects, is still a good start. It is important that those who approve the funds should have a good grasp of what innovation is and also the market potential of the goods or services proposed. It would be important if such funds can be expeditiously released before the window of opportunity closes.

A good general bench mark is to ensure that an answer is available within six weeks of the application being lodged. The review panel should utilise a uniform rating system for applications and ought to take into account the appropriateness of the amount for the project applied for.

Seed funds should be provided on a competitive basis to assist new enterprises achieve a critical milestone on their commercialisation path. The money should accelerate the business development process and produce significant value for the company.

The funded milestone must be able to be completed within a defined time frame, say two years. The impact of the assisted project must be quantifiable and measurable in terms of return on investment and specific metrics that can be agreed upon like number of jobs created or revenue generated because of the intervention.

Funding should facilitate the growth and development of emerging technologies and nationally-recognised growth sectors with potential to offer competitive advantages for the country. National funding should seek to correct market failure in specific geographical regions and/or economic sectors, and in so doing, contribute positively to the growth of those sectors/regions. In our high unemployment environment enterprise funds should facilitate employment and wealth creation opportunities.

While each country has its own seed funding mechanisms, others have even gone further enough to use seed funding to try and attract some of their nationals living in the Diaspora. A June 2011 article 'Brain Drain' or 'Brain Exchange': What Is the Cost When Immigrant Entrepreneurs Go Home?, Start-Up Chile was used as an example that uses seed funding to attract its Diaspora to support economic activity back home.

Start-Up Chile offer US$40,000 of equity-free seed capital and a one-year extendable work visa for the entrepreneurs and their immediate family members who decide to relocate mainly from the USA to Chile during their six-month commitment period.

To ask the right questions would require the assessors to have a good understanding of the local landscape. If someone forms a company just to access some national funding mechanism, it is a clear warning sign that they are not the correct beneficiary. The danger for an enterprise fund is always how to protect it from the predatory instincts of the national elite like what happened in the past with the funds that were disbursed to support agricultural projects.

Instead of going towards supporting the most needy un-bankable farmers in far flung areas, most of the money ended up in the pockets of the informed elite who already had the capacity to borrow without government support. The additional irony is that the same elite have refused to pay back putting a stop to the potential of the fund becoming revolving.

An ethical bank manager would be able to tell that someone who has three latest 4x4 vehicles in his garage but comes to the bank to ask for money to buy a start up farming tractor is more interested in maintaining a particularly societal image than actual farming. For someone with the capacity to pay, an unwillingness to contribute part of the required funds from own savings is a clear indication of a looting mentality.

Government enterprise seed funds can be used to encourage equitable geographical spread of development, exports and/or import replacement. The funding should enhance the capacity of small enterprises to develop exportable products, and enhance the capacity of small enterprises to develop products that reduce the dependency on imported products.

I have nothing against trading as a vocation but there is need to guard enterprise support funds from being used as slush funds to purchase goods for resale from Beijing, Dubai and yonder. It is what decimated our industries in the first place and landed the country in the current predicament.

Since agriculture is at the centre of our economy, enterprises that add value to agro-products should feature high on our priorities. A large percentage of our agricultural produce is lost due to poor post-harvest handling and it takes innovations to address these issues. Coming from the eastern highlands, I have seen large amounts of fruits rotting because they do not get to the market on time.

Innovation should not have to be rocket science. I could just be using avocado fruits to make avocado oil and lotions. It could be drying and packaging excessive mango fruit or maybe it could be making a commercial soup from traditional mushrooms or tomatoes.

Seeding funding, when appropriately deployed, can be another vehicle to stimulate enterprise development, job creating and ultimately economic development which we all desperately crave for.