About the Grant

The Government of Lebanon (GOL) established a funding facility through a loan by the World Bank and managed by Kafalat SAL, called Innovation in SMEs (iSME).

The programme’s development objective is to encourage the equity investment market to increase the supply of early stage investment finance for financially viable, new, and existing innovative firms.

The iSME Programme will provide two types of financing:

  • Concept Development Grants (CDGs) to stimulate ideas generation and concept development
  • Equity co-investment to support the early stage growth of a firm

Concept development grants (CDGs) will be given to eligible recipients to support the preparation and development of innovative business concepts, strategies, studies and plans. Under this grant, potential entrepreneurs with a new business idea will be invited to apply for a small grant to help them develop their innovative concept.

The grants will be provided in two phases:

  • Phase 1: up to US$5,000 which would allow the entrepreneur to begin working on a proof of concept
  • Phase 2: up to US$10,000 which would enable the entrepreneur to work closely with angel investors and venture capitalists (VCs) to prepare the enterprise for possible early stage equity financing

Who can apply

Eligible applicants are those that show legal residency in Lebanon and may be:

  • Individuals as defined under Lebanese Law.
  • Companies incorporated in Lebanon within one year from the date of application.

The grant is intended for those offering innovative and new ideas in any sector.
Innovation is defined at its most general as:

  • doing/producing new things
  • doing things in a new way.

This can happen in any sector, where there is the creation of new products, new services or new processes in business and new can mean new to Lebanon, regionally, or globally.

Use of the Grant

The grant is to be used to collect the information needed to support the proposed business by addressing key areas of risk such as market size, competition, revenue stream etc. The outcomes should improve the ability to demonstrate the value of the proposed venture, and could be:

  • Business plan/modeling
  • Marketing/sales strategy
  • Sector or market assessment
  • Prototype or other tools

The grant funds may be used for the purchase of goods and services as needed and may include:

  • Additional materials needed to develop and prove an innovative technology or process including software, small parts for prototypes, brochures, printing, copying, and others
  • Consultant and legal fees including assistance in technical and scientific resources, business plan development, and marketing strategy etc.
  • Survey costs and related data management/administration

 

Application Process

Application for grants could be done online.

Evaluation is a two-step process whereby:

  • First, a preliminary eligibility screening is done by the PMU Management team at Kafalat to assess if the application meets the eligibility criteria
  • Second, if the application passes the screening noted above, the application is forwarded to three evaluators (selected from a pool of evaluators) who will assess the proposal and decide on the winning application

In case of grant approval, the beneficiary has 6 months to submit their outputs in accordance with the requirements outlined in point 1.

If you are applying for a second phase grant after receiving the first phase grant, the following is required:

A report on the outcome of the first phase grant by the Start-up within 1 month of completion of the grant activity including indicating whether further funding has been obtained on the basis of the grant.

Should the grant be awarded, the recipient will have to sign a Grant agreement with Kafalat.

Application fee

A non-refundable handling fee of $50 is required.

Non-Elegible Financing

  • Production or trade in alcoholic beverages (excluding beer and wine)
  • Production or trade in tobacco
  • Gambling, casinos and equivalent enterprises
  • Activities involving pest management
  • Activities in disputed areas
  • Rehabilitation of latrines, septic or sewage systems
  • Arms, weapons and munition production or dealing
  • Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals. Hazardous chemicals include gasoline, kerosene, and other petroleum products
  • Prohibited drugs
  • Real estate purchases and any physical intervention including construction and rehabilitation
  • Activities that limit or deprive of individual or community’s access to land, assets or available resources
  • Activities that cause displacement of individual or community, involuntary taking of land resulting in relocation or loss of shelter, loss of assets or access to assets, loss of income sources or means of livelihood, whether or not the affected person must move to another location, or involving the involuntary restriction of access to legally designated parks and protected areas
  • Activities in a protected area or a natural habitat
  • Activities that have or may have impacts on the health and quality of forests, affect the rights and welfare of people and their level of dependence upon or interaction with forests, or that aim to bring about changes in the management, protection, or utilization of natural forests or plantations, whether they are publicly, privately, or communally owned
  • Activities that may adversely affect or benefit an indigenous people, or that impinge on the lands owned, used or claimed under adjudication, by indigenous peoples
  • Activities that involves, or results in diversion or use of surface waters
  • Activities that affect dams, weirs, reservoirs or water points
  • Activities that affect physical cultural resources,  which are defined as movable or immovable objects, sites, structures, groups of structures, and natural features and landscapes that have archaeological, paleontological, historical, architectural, religious, aesthetic, or other cultural significance, that may be located in urban or rural settings, and may be above or below ground, or under water, and the cultural interest of which may be at the local, provincial or national level, or within the international community
  • Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCB, wildlife or products regulated under CITES
  • Production or trade in wood or other forestry products other than from sustainably managed forests
  • Production or trade in radioactive materials
  • Production or trade in unbounded asbestos fibers
  • Drift net fishing in the marine environment using nets in excess of 2.5 km. in length
  • Activities that involve hydroelectric, irrigation, flood control, navigation, drainage, water and sewerage, industrial, and similar activities, including detailed design and engineering studies of such activities,  or potential pollution of international waterways, defined as: Any river, canal, lake, or similar body of water that forms a boundary between, or any river or body of surface water that flows through, two or more states, any tributary or other body of surface water that is a component of any waterway described above.  and any bay, gulf, strait, or channel bounded by two or more states or, if within one state, recognized as a necessary channel of communication between the open sea and other states--and any river flowing into such waters
  • Production or activities involving harmful or exploitative forms of forced labor (all work or service, not voluntarily performed, that is extracted from an individual under threat of force or penalty/harmful child labor (the employment of children that is economically exploitive, or is likely to be hazardous to, or to interfere with, the child's education, or to be harmful to the child's health, or physical, mental, spiritual, moral, or social development)