The Seed Capital Grant Scheme (SCGS) was first disbursed in 2017 as a means to provide financial support to start-ups. A total sum of SCR25 million was allocated for a period of five (5) years, in other words a sum of SCR5 million was allocated to be disbursed yearly for the following five (5) years. It was intended that this sum would cater for 100 applicants annually, each benefitting with at most SCR50,000.
In 2020, the scheme was suspended in light of the country’s economic situation as a result of the COVID-19 pandemic. Enterprise Seychelles Agency (ESA) took this opportunity to conduct an evaluation of the efficacy of such a scheme.
SCGS is a direct response to address access to finance which remains a major hurdle in doing business especially for start-ups. Following the review and in line with the aim of encouraging innovation for a more diversified and resilient economy, the proposed focus is on innovation and value addition. For the purpose of the scheme, a clear definition of the terms “innovation”, “innovative businesses” and “value addition” has been defined, so that predictability and transparency may be ensured:
a. “Innovation” means a new or improved product or process (or combination thereof) that differs significantly from the unit’s previous products or processes and that has been made available to potential users (product) or brought into use by the unit (process);
b. “Innovative Business” means any business that produces a good/service that satisfies the definition of innovation and/or partakes in innovation activities; and
c. “Value Addition” means the substantial transformation that a local raw input undergoes by means of being processed which results in substantial change in the product or in the use of the product.
The scheme will be administered by the ESA and the funds will be managed by DBS.
- Application period and submission
The application period will be open for four (4) weeks from the 1st September 2022 to 30th September 2022 only.
All applicants must submit the following documents:
- An elaborate business plan including financials detailing the expenses and projected revenue of the business for a period of five years, including expenses which the Scheme does not cover (download template);
- A procurement plan (download template);
- Copy of the National Identification Card of all applicants/promoters;
- Business Registration Certificate if the business is already set up. Start-up businesses will be required to submit the Business Registration Certificate after receiving an approval in writing from Enterprise Seychelles Agency;
- If your business is already licensable, provide a copy of your license;
- Certified quotation(s) or proforma(s) or document(s), relating to your grant request; and/or
- A letter from the Bank if your grant request relates to personal contribution towards a bank loan for the same business for which the grant is being applied for.
ALL APPLICATIONS SHALL BE SUBMITTED ONLINE (www.esa.gov.sc)
ANY APPLICATION WHICH IS SUBMITTED PHYSICALLY (IN PRINTED FORMAT) WILL NOT BE ACCEPTED.
- Eligible businesses
Categories to benefit with the grant are sustainable businesses, manufacturing, technology and innovative businesses that will benefit the business owner as well as the community.
The product or service must be in the sectors identified as priority sectors as determined by Government. At present, the priority sectors are tourism (diversification), fisheries, blue economy, agriculture, value added and manufacturing and Information and communication technology.
Businesses more likely to benefit are those proposing new products and/or services that have potential to be marketed and distributed internationally, and those producing products and/or services which are substantially improved compared to the state of the art in the local industry.
Your business should NOT be older than 36 months old from the date it was registered with the Registration Division and at the time of submitting the application.
Your business should have a turnover or balance sheet total that does NOT exceed SCR2 million. Where your business is yet to generate a turnover, the cash flow projection of the first year’s annual turnover shall be considered.
- Eligible Expenses
The funding from this scheme is mainly to support the beneficiary raise additional funds, acquire technology and equipment and other relevant assets for the starting up or expansion of a business.
The scheme has been extended to cover selected cash flow expenses, as a working capital component, such as rent which the business may incur if it is to find a workspace outside of the support of the state. Such working capital support will be extended for the initial three (3) months from the start of operation of the business. Thereafter, the business should be able to cover its costs and grow.
Other expenses which the Scheme may be extended to is marketing-related costs of the business so that it may engrave itself into the market as well as certain operating costs to acquire packaging materials which would further enhance the quality of the end product/service.
- Non-Eligible Expenses
The Scheme will not fund the following types of expenses:
- Refinancing of existing loans;
- Refunding of previous expenses relating to the business for which the grant is being applied for;
- Payment of airfares;
- Acquisition of bonds;
- Payment for the construction or extension of business premises located at the applicants’ residence (walls, kitchen etc…);
- Purchase of vehicle;
- Purchase of household furniture; the Seed Capital Grant Committee reserves the right to decide what kind of furniture is acceptable for funding; and
- Any other payments or funding which the Committee deems irrelevant to the business.
- Grant Amount and disbursement
The maximum amount disbursable to an individual business is SCR200,000.
Payment will be disbursed directly to the supplier and not to the beneficiary’s bank account, unless it is for working capital. Complete details of the suppliers (local and international) must be submitted including signed invoice, full address and contact details.
The proposal must show originality and or differentiation from other mainstream substitutes.
The business proposal must have set objectives and a clear plan as to how they will be addressed.
The idea/proposal must be geared towards addressing a specific problem or meet a demand in the market/community. It should display, practicality, usability and marketability.
Would the product or service stand have some durability in the market or is it only a temporary need? If it is temporary, it must prove its short term success justifying the funding and ability to generate more than the investment funds, enough to create reasonable earnings to the promoter. Longer durability would be preferential for such funding.
The proposal should demonstrate the ability to scale up, continuously meet standards and be replicated.
The proposal must be able to show a potential to earn a revenue and be sustainably profitable.
Recipients of the Scheme should have experience in the field that they wish to venture into. Applicants must be well versed in their business idea and able to explain the processes, including sources of the inputs, and day-to-day operations of the business including costs and cash flow projections.
- Evaluation Process
A two-phase evaluation will be done by the Evaluation Committee. The first phase will consist of shortlisting the applications with the guidance of the established criteria. Whereas the second phase will consist of interviews conducted by the Committee.
Successful applicants are to be monitored for a period of two (2) years. The beneficiaries will also be required to present a financial report yearly to ESA on the revenue and expenses, which could be similar to the returns submitted to the Seychelles Revenue Commission (SRC).
In addition, audit or spontaneous visits will be carried out by the Enterprise Seychelles Agency.
The awardees of the Seed Capital Grant Scheme will be required to follow a support mechanism with Enterprise Seychelles Agency (ESA) in the lead in collaboration with Seychelles Investment Board and the Department of Science Technology Innovation, who will offer the necessary support and guidance to the successful applicants. All successful applicants will be required to participate in a mandatory training program before disbursement.
If funds remain unused beyond a period of 24 months from the date of approval, the fund shall be returned to the Government account. Where a beneficiary has used the funds in a manner not prescribed in the agreement between himself and ESA, the applicant will be required to refund to total amount misused to the Government account within a period of no more than 6 months.