The National Venture Capital Fund (NVCF) is a project from the Ministry of Finance that was launched in the 2020 Budget. The aim of the initiative is to assist local startups and small businesses in accessing funds to further their business ideas.
“Priority is given to projects with the capacity to create new employment, generate foreign currency through exports, substitute importation, promote women and youth entrepreneurship, projects with high technological impact as well as projects with an internal rate of return of more than 15 percent and a good developmental impact”National Venture Capital Fund (NVCF) via The Herald
The NVCF, like all other investors, will be investing in a startup or business as an equity partner. This essentially means that the organisation will have a share in profits as well as losses and has a stake in the business.
When the NVCF launched, the Ministry of Finance set aside ZWL$500 million. Of the sum, ZWL$300 million has, according to a report by The Herald, been invested in local startups. However, which startups and entrepreneurs have thus far benefitted from the program was not disclosed.
The National Venture Capital Fund is now looking to expand its reach and is looking for investment proposals that it says can stimulate the growth of the economy and create employment opportunities. That being said, the criteria for proposals was not listed, so it suggests that there isn’t any industry that the NVCF will not consider.
I think this is a small silver lining when we consider that the govt has for the longest time ignored local startups. An example of this is how firms like Tuverl, Dawa Health, FlexFinTx, Thumeza and more have been included in international incubators and accelerators but the govt has paid them and others no mind.
At this point, there will be those that are will say “why do they need the govt’s recognition?”. Well, the answer to this is simple, the government holds regulatory keys that have made starting a business on the bleeding edge of what Zimbabwe currently knows almost impossible.
If you don’t believe me you can ask any of the players in the crypto or payments space just how much red tape exists in Zimbabwe. On the other hand, this initiative by the NVCF shows at the very least that the powers that be want to tap into the potential of local startups.
But the true test will be what regulatory changes and allowances the govt will give Zimbabwe’s innovators. We can not continue to live in a system that represses potential for the sake of some measure of control.