Annual Program Statement (APS) No.

SMEA - CF- 001

Issuance Date: 1st April 2018

Dear Applicant:
The USAID Small Medium Enterprise Activity (SMEA), implemented by Chemonics International,
is seeking concept papers for activities focused on solving challenges to increase the
competitiveness of the Information and Communication Technology (ICT), and
Hospitality sectors while also focusing on the cross cutting issues of access to finance and
women led organizations. SMEA is a five-year, USAID-funded project working with small and
medium enterprises (SMEs)1 in selected sectors to enhance their competitiveness and result in
increased jobs, sales, exports, adoption of technology and new practices, access to finance, access
to market and improved performance in women-led enterprises. The grants will be awarded and
implemented in accordance with USAID and US Government regulations governing grants under
contracts and SMEA’s internal grant management policies. These regulations and policies will be
covered under concept paper development workshop scheduled on 10th April 2018 at Islamabad,
24th April 2018 at Lahore, and 30th April 2018 at Karachi. (see section IV-B for details)
Project and Chemonics employees may not ask for, and applicants are prohibited from offering,
any money, fee, commission, credit, gift, gratuity, thing of value, or compensation to obtain or
reward improper favorable treatment regarding this solicitation. Any improper request from a
project employee should be reported to the chief of party or BusinessConduct@chemonics.com
The following Annexes are included with this APS:

- Annex A – Grant Concept Paper Template.

- Annex B – Mandatory and Required as Standard Provisions for U.S. and Non-U.S. Non-
governmental organizations receiving a fixed amount award can be accessed through the following
URL: https://www.usaid.gov/sites/default/files/documents/1868/303mat.pdf
- Annex C- Illustrative list of Challenges

1
A small enterprise is a business that employs up to 50 employees and has an upper limit of Rs. 150 million for annual sales
turnover.
A medium sized enterprise employs 51-250 (Manufacturing & Services sectors) and 51-100 (Trading sector) workers. The
annual sales turnover for a medium sized business should be more than Rs 150 million and up to Rs. 800 million.
Source: State Bank of Pakistan

SMEA-CF-001 Page 1 of 25
Table of Contents

SECTION I. PROGRAM DESCRIPTION ...................................................................................... 3

SECTION II. AWARD INFORMATION ...................................................................................... 6

SECTION III. ELIGIBILITY ................................................................................................................ 6

SECTION IV. CONCEPT PAPER AND SUBMISSION INFORMATION ............................. 7

SECTION V. EVALUATION AND MERIT REVIEW CRITERIA ........................................... 10

SECTION VI. AWARD AND ADMINISTRATION INFORMATION ................................. 14

SMEA-CF-001 Page 2 of 25
SECTION I. PROGRAM DESCRIPTION

I-A. OBJECTIVE & TYPE OF GRANTS

The SMEA Challenge Fund will work over the five years to increase competitiveness of Pakistani
SMEs. Under this APS, the SMEA Challenge Fund introduces two funding streams to the eligible
applicants to either shape a new business or to strengthen the competitiveness of an existing
Business.

1. Innovation Grants (Solve the Challenge) is a two-tiered funding mechanism. Applicants

are required to propose innovative solutions to challenge(s) (attached as annex C) and potentially
be awarded an initial grant of up to PKR 2,600,000/. Grantees enrolled in this type of grant will
have the opportunity to implement and scale their solution through a larger Scale-Up Challenge
Grant between PKR 5 Million to 40 Million. This second-tier funding will be awarded to those
pilot projects that demonstrate the ability to design, launch, market, and grow their products and
have potential to increase SME performance in terms of the project indicators; increased jobs,
sales, exports, adoption of technology and new practices, access to finance, access to market and
improved performance of women-led enterprises. The workflow for innovation grant (solve the
challenge) is given below;

SMEA-CF-001 Page 3 of 25
2. SME Growth Grants: The other funding stream available is SME Growth Grant. This type
of grant will be for existing/new SMEs to increase their competitiveness in the target sectors of
ICT and Hospitality sectors while also focusing on the cross cutting issues of access to finance
and women led organizations and will have an award value of up to PKR 2,600,000/. This grant
can be utilized for any support that will result in increased competitiveness for that specific
applicant as long as it contributes to the SMEA’s objectives of Increased jobs, sales, exports,
adoption of technology and new practices, access to finance, access to market and improved
performance of women-led enterprises. The workflow for SME growth grant is given below;

I-B. BACKGROUND
The goal of SMEA is to work with SMEs across selected economic sectors to contribute to SME-
led economic growth, SMEA will contribute to the following objectives and sub-objectives:

• Objective 1: Improved Business Enabling Environment (BEE)

o Improved Government of Pakistan (GOP) ability to develop and implement
reforms of policies, laws and regulations
o Strengthened private sector and civil society engagement in policy-making

• Objective 2: Improved economic performance of focus enterprises

o Improved economic performance in selected sectors

SMEA-CF-001 Page 4 of 25
 o Improved technological readiness and innovation
o Increased access to markets
o Increased access to finance
o Enabled women SMEs run profitable business

o Sub-objective 3.2.2B: Improved technological readiness and innovations (Challenge Fund

for Technology and Innovation)
o Technical assistance to ICT firms to develop and market new technologies to
enhance competitiveness in selected sectors
o Creation and diffusion of innovative, sustainable, and scalable ICT and business
solutions to improve the competitiveness of Pakistani SMEs
o Collaboration between industry and academia addressing supply side constraints
in terms of trained labor
o Commercialization of ICT research
o Increased technology literacy

I-C. PROGRAM DESCRIPTION

Challenge Fund concept is to identify key challenges in specific sectors that are hampering growth,
then invite innovators to design and implement solutions. Private sector entities are encouraged
to apply to design and launch their services on a commercial basis, ensuring sustainability. New
participants in the value chain, in the form of these innovators, are encouraged to think “out of
the box” unhampered by the pre-conceived notions of the sector’ participants who have, over
time have come to accept the sector’s challenges and limitations. SMEA recognizes that some
grantees may need technical assistance to more effectively carry out the activity. Consequently,
applicants are encouraged to include any needs for specific technical assistance and/or training in
their Concept paper.
I-D. AUTHORITY/GOVERNING REGULATIONS
SMEA grant awards are made under the authority of the U.S. Foreign Affairs Act and USAID’s
Automated Directive System (ADS) 302.3.5.6, “Grants Under Contracts.” Awards made to non-
U.S. organizations will adhere to guidance provided under ADS Chapter 303, “Grants and
Cooperative Agreements to Non-Governmental Organizations” and will be within the terms of
the USAID Standard Provisions available on;
https://www.usaid.gov/sites/default/files/documents/1868/303mat.pdf, as well as the SMEA grants
procedures. ADS 303 references two additional regulatory documents issued by the U.S.
Government’s Office of Management and Budget (OMB) and the U.S. Agency for International
Development:

• 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit

Requirements for Federal Awards, Subpart E (U.S. applicants are subject to 2 CFR 200 in
its entirety) Full text of 2 CFR 200 can be found at http://www.ecfr.gov/cgi-bin/text
idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl and;
• 2 CFR 700 at https://www.gpo.gov/fdsys/granule/CFR-2015-title2-vol1/CFR-2015-title2-
vol1-part700. SMEA is required to ensure that all organizations receiving USAID grant
funds comply with the guidance found in these circulars, as applicable to the respective
terms and conditions of their grant awards..
Under the SMEA Challenge Fund grant program, USAID retains the right at all times to terminate,
in whole or in part, SMEA grant-making process.

SMEA-CF-001 Page 5 of 25
SECTION II. AWARD INFORMATION

Number of Grants: SMEA anticipates awarding approximately 30 Grants (15 SME Growth
Grants and 15 Innovation Grants (Solve the Challenge) up to a maximum value of PKR 2,600,000
per grant through this APS. The actual grant award will be dependent upon grant activities and
final negotiation and may be lower than the ceiling listed above.
Duration: The duration of any grant award under this solicitation is expected to be no more
than six months (Ideally between 4-6 months)
Type of Award: The Grants under both funding streams will be Fixed Amount Award Grants
where the applicant needs to develop clear milestones that shall support the budget against each
milestone. SMEA will reimburse costs on completion of each Milestone in accordance with the
approved budget.

SECTION III. ELIGIBILITY

III-A. ELIGIBLE RECIPIENTS

USAID SMEA grant support may be extended to not-for-profit, for-profit, NGOs, associations
and firms providing they are legally registered and recognized under the laws of Pakistan.
Unregistered firm can apply but will need to get registration before grant award is made.
Illustrative types of organizations may include:

• NGOs
• Local organizations
• Industry associations
• Innovation centers
• Private sector entities

III-B. OTHER INSTRUCTIONS:

• For Innovation Grants (Solve the Challenge) the applicant must address one of the
challenges listed in annexure C.
• If the applicant wishes to apply as joint venture/consortium of more than one entity/SME,
it may only submit one application per prime organization under this APS.
• Applicant must demonstrate that proposed activities will contribute to the achievement
of SMEA objectives highlighted above in SMEA targeted sectors.
• Applicants must display sound management in the form of financial, administrative, and
technical policies and procedures and present a system of internal controls that safeguard
assets; protect against fraud, waste, and abuse; and support the achievement of program
goals and objectives. SMEA will assess this capability prior to awarding a grant.
• The project will work with the successful grantee to draft a branding and marking plan
which will be annexed to the grant agreement.
• Required Certifications: The grantee is required to sign these certifications prior to grant
award. As a prerequisite to receiving a grant from a U.S. Government source, USAID
requires that recipients sign certifications regarding terrorism, narcotics, procurement,
and other eligibility factors. These include Certification Regarding Terrorism Financing,
Implementing Executive Order 13224; Key Individual Certification for Narcotics Offenses
and Drug Trafficking; Participant Certification for Narcotics Offenses and Drug
Trafficking; and Certification Regarding Debarment, Suspension, Ineligibility and Voluntary

SMEA-CF-001 Page 6 of 25
 Exclusion Lower Tier Covered Transactions, Prohibition on Providing Federal Assistance
to Entities that Require Certain Internal Confidentiality Agreements
• SMEA encourages Concept papers from new organizations, Women Owned and Women
Managed organizations who meet the above eligibility criteria.
• This funding will be subject to all applicable USAID’s rules and regulations and availability
of funds.
• USAID’s branding and marking regulations will apply.
• In case of eligible applicants exceeding the number of grants offered, Concept papers will
be treated on first come first serve basis and evaluated on the pre-defined merit criteria
(Grants will be awarded to top ranked applicants till the number of target is met).
• USAID-SMEA reserves the right to accept/reject any or none of the Concept paper
submitted, with or without providing the reason.
• The applicant shall ensure that the proposed project activity is not funded by any other
USAID’s assisted project or program.
• An applicant may submit more than one concept paper for multiple grants type/sectors,
but only one grant will be award subject to evaluation.

SECTION IV. CONCEPT PAPER AND SUBMISSION INFORMATION

IV-A. INSTRUCTIONS TO APPLICANTS

Applicants must propose activities which shall result in complimenting some or all key objectives
of SMEA which includes increased jobs, sales, exports, adoption of technology or new practices,
improved access to finance, increased access to market and/or improved performance of women
led enterprises. The proposed activities should also be appropriate to their organizational
strengths.
IV-B. GRANT APPLICATION
This is a two-stage application process. The first stage is for the applicant to submit a Concept
paper. Concept paper forms will be evaluated against the merit review criteria listed in Section
V below. If the applicant successfully meets or exceeds the merit review criteria, they may be
invited to submit a full Business plan/detailed information. Concept papers will be reviewed in
three batches till 30th September 2018. Applications received till May 15th will be evaluated during
first round. The second batch of concept papers received from May 16th till June 29th will be
evaluated in the second round. Concept papers received from June 30th till Sept 30th will be
evaluated in the third round.
(Note: SMEA will conduct the 2nd & 3rd round of evaluation only if the targeted number of grants are not
met through the first round)
Please read the Instructions before you start filing in the template for Concept paper
identified as Annex A. Applicants shall present their technical Concept paper and budget in the
formats provided and shall follow the instructions and guidelines listed in these annexes.
All grant activity costs must be within the normal operating practices of the applicant and in
accordance with its written policies and procedures. For applicants without an audited indirect
cost rate, the budget may include direct costs that will be incurred by the applicant to provide
identifiable administrative and management costs that can be directly attributable to supporting
the grant objective.

SMEA-CF-001 Page 7 of 25
The concept paper must be signed by an authorized agent of the applicant organization
USAID SMEA is organizing multiple Concept paper Development Orientation Sessions for eligible
applicants on 10th April 2018 at Islamabad, 24th April 2018 at Lahore, and 30th April 2018 at
Karachi. These sessions will provide applicants with an opportunity;
✓ To explore and understand about the funding streams available under Challenge Fund.
✓ Overview about how to fill in Concept paper
✓ To understand and map their ideas that supports the objectives of SMEA

This is a free of cost session, but seating is limited (max 02 participants per organization/
applicant), so register your organization well before the planned dates by sending an email to
Challengefund@pakistansmea.com with clear subject line: Registration for Orientation Session.
SMEA will not provide any travelling or daily allowance to applicants for attending these sessions.

IV- C. INELIGIBLE EXPENSES

SMEA grant funds may not be utilized for the following:

• Construction or infrastructure activities of any kind. Note that Per ADS 303.3.30 and the
ADS 303 Mandatory Reference entitled, “USAID Implementation of Construction
Activities” dated August 22, 2013, construction is not eligible for reimbursement under
grants resulting from this solicitation. Construction also includes improvements,
renovation, alteration, and refurbishment.
• Ceremonies, parties, celebrations, or “representation” expenses.
• Purchases of restricted goods, such as: restricted agricultural commodities, motor
vehicles including motorcycles, pharmaceuticals, medical equipment, contraceptive
products, used equipment; without the previous approval of SMEA, or prohibited goods,
prohibited goods under USAID regulations, including but not limited to the following:
abortion equipment and services, luxury goods, etc.
• Alcoholic beverages.
• Purchases of goods or services restricted or prohibited under the prevailing USAID
source/ nationality (Cuba, Iran, North Korea, and Syria).
• Any purchase or activity, which has already been made prior to the signing of grant
agreement
• Purchases or activities unnecessary to accomplish grant purposes as determined by the
SMEA Project.
• Prior obligations of and/or, debts, fines, and penalties imposed on the Grantee.
• Creation of endowments.

SMEA-CF-001 Page 8 of 25
IV- D. SUBMISSION INFORMATION

• Concept papers shall be submitted in English and may not be more than 8 pages (excluding
supporting documents)
• Concept papers (Technical and budget proposals with supporting documentation) should
be submitted in electronic OR hard copy to USAID Small and Medium Enterprise
Activity;
o For Electronic Submission: Challengefund@pakistansmea.com
o For Hard Copy Submission: PO Box # 575 Islamabad
• Mention the reference number as APS #. SMEA-CF- 001 in the subject line/envelop. Also
mention the type of grant selected from the 02 available funding streams i.e. Innovation
Grants (Solve the Challenge) or SME Growth Grants e.g. APS # SMEA – CF – 001 –
Innovation Grants (Solve the Challenge).
• The concept paper for Innovation Grants (Solve the Challenge) must be addressing the
challenges faced by SMEA sectors (An illustrative list of challenges is attached as Annex C)
whereas concept paper for Growth grants can address any challenge in ICT or Hospitality
sectors. Concept paper must show performance against project indicators; increased
jobs, sales, exports, adoption of technology and new practices, access to market, access
to finance, and improved performance of women-led enterprises
• Late/Ineligible/Incomplete/unresponsive applicants will not be considered
• Due to large volume of applications SMEA may not be able to respond back to every
applicant. However; In case you do not hear back from SMEA within 3 months of
submission of your Concept paper it can be implied that the Concept paper did not
qualify among the top ranked applicants as per the evaluation criteria and the number of
grants available.

IV-E Co-Creation Workshop (For Innovation Grants - Solve the Challenge Only)

SMEA will organize voluntary, pre-application co-creation workshops in Islamabad and Karachi.
The co-creation workshops are open to all potential applicants and SMEs who may be
beneficiaries of the project. The workshop is aimed to familiarize participants with the main
methodological elements of a user-centered innovation process through the practice of co-
creation methodology and guide them in an innovation exercise and serve as preparation for
further innovation processes to be developed in their solution. The workshop will use a
structured approach by combining co-creation process with business idea that help navigate
solution development process.
Two co-creation workshops are tentatively scheduled; one at Islamabad on April 26th 2018 and
another at Karachi on May 1st 2018. Interested applicants can get them registered for co-creation
workshops by sending an email request to co-creation@tieislamabad.org at the earliest by
mentioning ‘’Co-Creation Workshop Registration’ in subject line. The slots are limited and will
be allotted on first come first serve basis. (Max 2 participants per organization/applicant)
This workshop will encourage and facilitate potential applicants through visual thinking.
Constituting a human-centered, approach, offering entrepreneurs of any stripe a chance to deeply
understand the people they’re looking to serve, and create innovative new solutions rooted in
people’s actual needs. Participants will include innovators and businesses from relevant SMEA

SMEA-CF-001 Page 9 of 25
sectors who would then be made part of working groups. The exercise will have businesses
presenting the problems and innovators will be challenged to design solution around the problem.
The idea is to provide potential applicants with first-hand knowledge of challenges faced by the
businesses or in any specific sector or industry. After co-creation workshops, applicants may
submit concept papers for Innovation Grants (Solve the Challenge).
It is not mandatory to attend co-creation workshops but these workshops will improve the
understanding of potential grantees and could prove to be useful. Participation in the SMEA-
organized workshops is free-of-charge, however participants are responsible for their own
boarding and lodging.

SECTION V. EVALUATION AND MERIT REVIEW CRITERIA

V-A. SME Growth Grants:

Concept papers for SME growth grants will be reviewed by an internal review panel comprised
of SMEA appointed technical implementation staff, and recommendations may be vetted by a
larger group. Concept papers will be evaluated against the criteria below
Criteria Sub-Criteria Score[8-10] Score[5-7] Score[0-4]
5+ 3-4 0-2
Jobs
New Jobs New Jobs New Jobs
Potential Impact
Possible but Challenges
from the Grant Export Export potential Not possible
needs to be addressed
(35%)
Projected Sales
Growth OR 15%+ Sales Growth 5-14% Sales Growth 1-5% Sales Growth
Possible Revenues
Sweat equity or 40%+ 20% - 40% No contribution or minor
SME commitment
contribution of up to 20%
(10%)
funding
Marketing Strategy Absolute clear plan Good plan however lack None or poorly
with well-defined detailed activities, approach demonstrated
activities, approach & & mediums
Marketing Plan
mediums
(25%)
Target Market New/existing markets Existing/new reasonably None or wrongly defined
& customer segment sized markets however customer base
is clearly defined challenging customer base
Strong, complete and Strong but missing few key Team incomplete / Skill
skill sets are in alliance roles or skills sets do not match role in
Team
with key roles in the the organization/project
organization/project
Strong research to Some market research No market research or
Research on support the proposal conducted with encouraging very weak research
product need with very encouraging outcomes, however needs
Unique capabilities outcomes improvement
(30%) Strong capability Satisfactory capability with Weak or No capability to
Product/service
already available as per potential to raise the develop the proposed
development
the proposed human capability with respect to product/service
capabilities
resource proposed human resource
Solid product/service Vague but potential to Weak or No
Product/service
development strategy improve the product/service
development
product/service development strategy
strategy
development strategy

The applicants who rank the highest will be awarded grants as per the target. They may be
requested to submit detailed business plan or additional information before grant award is signed.
The new companies who were not registered as per the applicable laws of Pakistan at the time

SMEA-CF-001 Page 10 of 25
of concept paper submission will be required to get registration before grant award is made. (Un-
registered organizations will not qualify for grant award).

V-B. Innovation Grants (Solve the Challenge):

The evaluation process for Innovation Grants (Solve the Challenge) is lengthier than the SME
growth grants, but successful grantees under this category may later be eligible for larger follow-
on /scale-up grants.
Criteria Sub-Criteria Score[8-10] Score[5-7] Score[0-4]
5+ 3-4 0-2
Jobs
New Jobs New Jobs New Jobs
Potential Impact
Possible but Challenges
from the Grant Export Export potential Not possible
needs to be addressed
(30 %)
Projected Sales
Growth OR Possible 15%+ Sales Growth 5-15% Sales Growth 1-5% Sales Growth
Revenues
SME Sweat equity or 40%+ 20% - 40% No contribution or minor
Commitment contribution of up to 20%
(10%) funding
Marketing Strategy Absolute clear plan Good plan however lack None or poorly
with well-defined detailed activities, approach demonstrated
activities, approach & & mediums
Marketing Plan
mediums
(25%)
Target Market New/existing markets Existing/new reasonably None or wrongly defined
& customer segment sized markets however customer base
is clearly defined challenging customer base
Strong, complete and Strong but missing the few Team incomplete / Skill
skill sets are in alliance key roles sets do not match role in
Team
with key roles in the the organization/project
organization/project
Strong research to Some market research No market research or
support the proposal conducted with very weak research
Research on product
with very encouraging encouraging outcomes,
need
outcomes however needs
Unique improvement
capabilities (20%)
Strong capability Satisfactory capability with Weak or No capability to
Product/service
already available as potential to raise the develop the proposed
development
per the proposed capability with respect to product/service
capabilities
human resource proposed human resource
Solid product/service Vague but potential to Weak or No
Product/service development strategy improve the product/service
development strategy product/service development strategy
development strategy
Innovation/ Innovative, scalable Not innovative but The product/service lacks
Innovation -
Response to and addresses a SMEA somewhat caters to SMEA innovation & doesn’t
Responded to SMEA
Challenge (15%) listed challenge listed challenge address SMEA listed
identified Challenge
challenge

SMEA-CF-001 Page 11 of 25
Phase I Concept Paper Review:
Concept papers and applications for Innovation Grants (Solve the Challenge) will be reviewed by
an internal review panel comprised of SMEA appointed technical implementation staff, and
recommendations may be vetted by a larger group. Concept papers will be evaluated against the
criteria below.
The overall score will be the average of the reviewers that will determine the 50 – 70 (approx.)
shortlisted applicants.
Phase II Business Model Development:
Short-listed applicants will be invited to Business Model Development Workshop to help the
companies and innovators to focus their business and products on the needs of the target clients
while building a business around the process. SMEA will sponsor the workshops; however, the
participants will be required to arrange for their own transportation. Below is an overview of the
workshop:
A. Workshop Content
Shortlisted applicants will be invited for a two-day workshop to assist them in developing their
final Business Plan with a clear and comprehensive design for the Business-to-Business linkage, to
ensure smaller firms in the value chain benefit from the linkage.
The workshops are highly experiential, mentorship-driven programs designed to visually facilitate
participants through the universal steps required to start and build a viable business. Brief
descriptions of activities during this two-day workshop are as follows:
- Visual thinking – Building the foundation for solutions: Understanding how to transform
ideas and opportunities into a successful solution is what makes applications so powerful.
In this session, participants will learn how to apply thinking, habits, behaviors, and essential
characteristics that will support them in constructing successful solutions.
- Designing the solution: Designing an action plan to arrive at the solution/product
through self-guided visual thinking tools.
- Building a core team, strategic partners, and advisor network: Participants will
understand and learn the essentials of how to create, enroll, and motivate a team around
their vision, and how to engage people to support building their core team, strategic
partners, and advisor network.
- Bootstrapping solutions/products for grantee investments: This will enable
grantees in leveraging external financing. The focus will be on increasing and maximizing
resources and identifying creative ways to raise money and make contributions.
- Mentorship and coaching by industry experts and academia: Experts will work
with participants to provide feedback and suggest improvements on proposed solutions
in view of industry requirements and what will work in the industry and what will not.
Business mentors will coach participants on how to build, launch, test, sell, and scale up
their solution. Academia will also be invited to the workshop to have an overview of the
workshop and provide their feedback and input.
- Technology validity: IT experts will work with participants to provide technical
assistance in terms of feasibility of the technology being applied or used for the solution.

SMEA-CF-001 Page 12 of 25
At the end of the Business Model Workshop, SMEA will organize a group of mentors, coaches,
experts, and other stakeholders to select 20 semi-finalists based on the following selection
criteria:

1. Criteria of the innovation team

• Their ability to listen and learn: Innovation is a process of creation while learning and
adjusting. During coaching, pitching, and training, the selection committee should evaluate
the innovators on their ability to listen, ask relevant questions, and learn. The innovator
does not necessarily adopt every piece of advice they receive, but should attempt to
understand different data points and points of view, as well as process them in an effective
way.
• Ability to take action and execute: Commercializing innovation is incredibly difficult to
achieve. It takes dedication and focus to move the innovation forward. The selection
committee will look at the innovators’ experience and records of achievement with
limited resources. From the selection committee’ interactions, they should give higher
scores to those innovators who seem more likely to act, and who will not make excuses
for inaction or who are unresponsive to feedback.
• Leadership: The founders of these companies need to demonstrate an ability to show
vision and motivate the team members, partners, suppliers, and investors supporting their
endeavor. Selection committee should look at innovators who have led people and those
who have shown an ability to motivate others into their vision. This also means that the
innovators who have shown an ability to build important partnerships increase their
likelihood of success.

2. Criteria for the Innovation

• Potential impact on the challenge given: Some of the challenges will have specific sector
goals. The innovator should be able to demonstrate through research, primary data
collection, case studies, and experiments that their potential solutions will drive results
to meet those goals. This includes presenting projected potential data on what those
impacts will look like. The selection committee will provide higher scores for those who
appear likely to drive high impacts and those who can present a stronger case for how
their solutions will drive those impacts.
• Supportive system and partnership: Most innovation works within a system and the
system needs to be ready or conducive for the innovation. For example, innovators have
been working on cloud computing since the 1990s, but the technology did not take off
until the prevalence of low cost internet and storage became widespread. Selection
committee will give higher scores for those innovations where the needed partnerships
and systems are proven and where it is not dependent on complementary systems and
technologies that are not yet fully developed.

The approx. 20 Semi-finalists will be provided with more intensive mentoring, connections, and
pitch support.

Mentoring
The semi-finalists will be assigned mentors (based on their location and industry sector), who will
assist by providing feedback to the application participants. Mentors will be identified by USAID-
SMEA, and they will only act as advisors.

SMEA-CF-001 Page 13 of 25
Pitch Training
This one-day training will help innovators create a sales pitch for their business by training them
to organize the flow of information regarding their business. Often, participants with great ideas
or solutions risk missing out on selection due to lacking the skills necessary to present their ideas
effectively.

Phase III: Business Plan Pitch and Final Grantee Selection

Final Pitching Session

The finalists will then be invited for a pitching session, where each will be given 15-20 minutes to
present their business pitch to a grant selection committee. The grant selection committee will
be comprised of sector or technical specialists for each given challenge. This will be followed by
a Question and Answer session. The selection committee will be encouraged to ask questions
regarding responses on progress, scalability, and investment needs of the semi-finalist’s activity.
The criteria will be the same as the semi-final round with one additional criterion: progress
accomplished in the last month. After this pitch, the selection committee will recommend which
proposals should be awarded "Innovation Grants (Solve the Challenge)".

Submission of the Business Plan

The recommended grantees will each submit their final business plan. The business plan will be
an important tool for SMEA in grant management. It should include major tasks of the activity
with specific milestones and should also clearly state the innovation impacts driven by the Solve
the Challenge grants. Lastly, the grants should have a budget for initial costs of developing the
innovation, and a 2-3-year forecast of additional financing and income driven from the innovation.
The submission of business plan is mandatory for the award of grant.

For both SME Growth and Innovation Grants (Solve the Challenge) SMEA will ensure
environmental soundness and compliance in design and implementation as required by 22 CFR
216. The recommendation or selection of a business plan for award by the Selection Committee,
respectively, does not guarantee the award. The applicant must have the capacity to adequately
implement the award. The SMEA Challenge Fund team will conduct a pre-award risk assessment
to establish if the grantee has the necessary management and technical competence to plan and
carry out the grant. No grant shall be awarded unless the project makes a positive determination
or suggests mitigating measures regarding the management, technical, financial, and administrative
capacity of the organization. The nature of the pre-award risk assessment conducted will depend
on the grant type, amount, duration, whether advances are authorized, and the potential grantee.

SECTION VI. AWARD AND ADMINISTRATION INFORMATION

All grants will be negotiated, denominated and funded in Pakistani Rupees (PKR). All costs funded
by the grant must be allowable, allocable and reasonable. Grant applications must be supported
by a detailed and realistic budget as described in Section IV.

Issuance of this APS and assistance with Concept paper development does not constitute an
award or commitment on the part of SMEA, nor does it commit SMEA to pay for costs incurred
in the preparation and submission of Concept paper. Further, SMEA reserves the right to accept
or reject any or all Concept paper received and reserves the right to ask further clarifications
from the offerors.

SMEA-CF-001 Page 14 of 25
 Annex A- Concept Paper Template

Guidelines:

A.1. Purpose

The Grant Concept Paper Template is designed to gather basic information about the Applicant
and what it is proposing to do. This Concept Paper should be submitted by the applicants in
response to APS. The concept paper should not exceed 8 pages (excluding supporting
documents)

A.2. Instructions by Section

Item 1 It is mandatory to select only one type of grant, that suits best with the techincal idea
of the Concept paper. Please provide the challenge number (refer to annexure C).
Applicable for Innovation Grants –(Solve the Challenge) only

Item 2: Organization’s name, if the organization is registered please write the registered name.

Items 3-4: Date when the organization was founded, legal status, type of registration (Eligibile
type of organizations includes; not for profit , for profit , NGOs, firms, local
organizations industry assosiations, innovation centers , private sector entities, etc,
and total funding amount requested.

Item 5: The total amount on the concept paper should be the same as proposed in Item 22
(budget) of the concept paper.

Item 6: Contact Information— Contact name, title, address, telephone, fax, e-mail, etc. The
contact person (agent) is responsible for communications between SMEA and the
Applicant. This applies to all aspects of the grant application, from initial summary
through negotiation and award. The agent must have full authority and responsibility
to act on behalf of the Applicant. The agent should be someone who will be directly
involved with the grant activity and has a proven, established relationship with the
Applicant.

Item 7: Kindly attach the list of all key staff members including BOD i.e. Name, Designation
and Gender with CNICs

SMEA-CF-001 Page 15 of 25
Item 8: Briefly describe the organization and its activities—This section should introduce the
Applicant and its background: how it was formed, its mission or purpose, major
accomplishments in the area of the targeted activity, current activities, past related
experience, and clients.

Item 9: References—List three donors, partner organizations, or community leaders that can
provide references for your organization’s ability to successfully carry out the financial,
administrative, and technical requirements of the grant activity. Briefly describe your
relationship to the reference and the nature and duration of your work together. If
the reference is a previous donor, list the activity and location of the activity(s) they
funded. Be sure to provide complete information, including a point of contact, with
telephone and email.

Item 10: Grant activity title—The title given to the activity should relate to the grant activity
objective.

Item 11: Proposed Location of Implementation.

Item 12: Anticipated duration should be stated with a degree of accuracy of plus or minus two
weeks.

Item 13: Background—Identify the problem that the grant’s activities propose to address
Provide description for the issues identified and how the proposed project will address
these issues, also explain why do you think it is important to address the issues that
are highlighted. Include the sources of funding for your existing SME operations.

Item 14: Describe why your organization will be the best to address the identified issues

Item 15: Applicants must propose activities which should have a quantifiable impact on some
or all key objectives of SMEA which includes Increased Jobs, Sales, Exports, Adoption
of Technology and New practices, Access to Finance, Access to Market and Improved
Performance of Women Led Enterprises e.g. an activity that utilizes ICT to develop a
web portal and recruits 03 additional employees for the organization is complementing
ICT and has created Jobs. It shall cater the merit review criteria mentioned in section
V of APS.

Item 16: Only applicable for innovation grant (solve the challenge): How is the proposed
activity innovative under Pakistani context. How does it addresses the SMEA identified
challenge (Refer to annex C)
(Define innovation broadly to include both new ideas and new applications of old
ideas)

Item 17: What is the market opportunity and how does proposed activities will take advantage
of the opportunity. Provide brief marketing plan

Item 18: Main task phases of the activity—Provide details regarding the subtasks of the activity.

Item 19: Approximate cost of this activity (cash, in-kind, and third-party sources)—Applicant
must submit a rough estimate of the cost of the proposed activity and sources of

SMEA-CF-001 Page 16 of 25
 funds, specifying how much will come from SMEA, the Applicant’s contribution, and
any third-party contributions (contribution of 50% on top of the grant budget from
applicant or third party sources is highly encouraged, In kind contribution may include
applicant’s existing resources related to the existing SME or the technical idea proposed in
the Concept paper, this may include but not limited to office space, equipment , furniture etc
. The value of applicant’s contribution should be based on depreciated rate or fair market
value at the time of grant award). An exact detailed budget is not necessary at this point,
only a plausible estimated calculation, which should be realistic and within 10 percent
(+/-) of the final approved budget. Note that the budget must be provided in PKR.

Item 20: Please refer to the comment within the table to identify the eligbility for the specific
checklist item

Item 21: Declaration from Applicant Organization

SMEA-CF-001 Page 17 of 25
 CHALLENGE FUND GRANT CONCEPT PAPER TEMPLATE
SMEA-CF-001

1. Type of Grant (Select only one)

a. Innovation ☐ Addressing Challenge #____________
(Solve the Challenge) (Refer to Annex C)

b. SME Growth Grants ☐

2. Organization Name: _________________________

3. Legal Status of Organization:

a. Registered ☐ (If Yes, Year of establishment)_________
b. Non – Registered ☐

4. Type of Registration NTN # /SECP Reg #): _______________________________

5. Total Fund requested from SMEA in PKR: _______________

6. Contact information:
Key contact person(s) Name:
Key contact person(s) Title:
CNIC #
Office address: Office phone:
Mobile: Fax:
Email: Website:

7. Key Management Details:

Name of Individual Designation CNIC # Gender

SMEA-CF-001 Page 18 of 25
 8. Briefly describe your organizational profile, its purpose, and past related
experience:
a) Organizational/Applicants Back ground:

b) Purpose:

c) Years of Relevant Experience: (If applicable)

9. List contact information for three (3) references from previous donors or
organizations
(U.S. and/or other professional reference) that your organization has collaborated with in the
past two years where applicable):
Name Nature of Title of Location Start End Contact Title Contact Email
of org. Relationship Project Date Date Person number
name

10. Title of the proposed grant activity / product / service being offered:

11. Proposed Location(s) of Implementation:

12. Anticipated duration of activity from start to finish: (Ideally 4-6 months)
Overall length (total number of months)
Start and end date (day, month, and year)

13. Background: (Refer to guidelines and respond the sub-questions as per your applicability)
a. What is the issue or problem that the activity will address? (applicable for Growth
Grants only)

b. Why do you think it is critical to address this issue?

c. Tell us a little about your current funding streams and how do you earn revenue?

d. Are you using any technology for marketing, process/operation management

and/or product development? How can technology help you in scaling up your
business

SMEA-CF-001 Page 19 of 25
14. How is your organization/team best suited to address this issue/challenge?

15. Objective of the proposed grant activity, Describe the proposed activity and
mention the expected results/outcomes (increase in sales, jobs, and exports) in
detail (Refer the guidelines for more information)

16. How does the proposed activities address “innovation”

(Only address if applying for innovation grants- solve the challenge)?

a) How your business idea is innovative and how does it address the SMEA identified
challenge?

b) Tell us about your market research in support of the proposed outcomes

c) Write about your capacity/potential to develop the product/services that will

address the challenge?

17. Briefly describe the Market opportunity, your market size and how this
proposed grant project will target that opportunity (i.e. Who are your
customers and how you will engage them, your brief marketing plan)

18. Implementation Timeline: (Please list the main task/milestones phases with estimated
start and end dates for each task/milestone. Please include all events, trainings, publications,
etc.)
Description of Grant Non-Grant Start &
Responsible Milestone of
Main Resources *Resources End
Party(s) Achievement
Tasks/Milestone Required Contributed Dates
Task 1:
Task 2:
Task 3:
Task 4:
Task 5, etc:
(please add rows as needed)
*Non-grant sources could be in-kind

SMEA-CF-001 Page 20 of 25
19. Approximate cost of this activity:
(mention if specific training is required to execute the project and include the cost in budget)
Applicant Resources (including
third party – Indicate the Grant Total
Budget Category amount of contribution from Amount Project
in PKR Non-US Govt. sources e.g. Required Amount
(Personal resources, loans from bank PKR (B) PKR (A+B)
PKR (A)
Salaries:
Other Direct Costs:
Training:
Travel and
Transportation:
Goods and Materials:
[Add more rows as
needed.]
Total Estimated
Costs (in PKR)
(The required Funding from SMEA should not exceed up to approx. PKR 2,600,000/-)
Any Other Information to be provided by applicant:

20. Check list: (Where applicable, the below information is mandatory)

Type of Documentations Provided (Select if
Remarks
provided)
Copy of Organization’s Registration Documents ☐ Applicable if the organization is registered
Partnership agreement (If applicable) ☐ In case of a joint venture/ consortium
Type of Grant selected ☐ Select only one type of grant on the
(Innovation or SME Growth) Concept paper
Select one sector only on the Concept
Organization Target Sector ☐
paper
Information of key individuals ☐
Mandatory Field
(along with CNIC copies)
Implementation Timelines ☐ Mandatory Field
Budget & Budget Narrative ☐ Mandatory Field

SMEA-CF-001 Page 21 of 25
21. Declaration by Applicant Organization:

1. The undersigned, being duly authorized to represent and act on behalf of

______________________, hereby applies to be considered for the project cited above along
with all the required documents, and declares & agrees the following:

a) I have examined and have no reservation to the APS document.

b) Applicant organization understand that USAID SMEA may cancel this solicitation call at any point
of time with or without providing any details to applicant organization.
c) By Submitting Concept paper or participating in Co creation Workshops applicant organization
does not expect guarantee of Grant award.
d) Information provided by applicant organization in this Concept paper will be subject to verification
if qualified for next round.
e) Applicant organization agrees to abide by the Standard Provisions for U.S. and Non-U.S. Non-
governmental organizations receiving a fixed amount award as mentioned in Annex B of APS
document.
f) USAID-SMEA reserves the right to amend the scope and value of any grant under this project in
consultation with the applicant.
g) The applicant and any of its senior management including BOD are not blacklisted by government
or any donor agency or financial institution.
2. USAID-SMEA and its authorized representative(s) may contact the following person(s) for further
information, if needed:

Person(s) to be contacted: ______________________ Telephone: _____________________

By affixing my signature below, I certify that the information provided in this Concept paper is accurate
and correct to the best of my knowledge.

Submitted by (Name & Title): ___________________________________________________

Signatures: ___________________ Date: _______________________

SMEA-CF-001 Page 22 of 25
 Annex C- Illustrative list of Challenges
Only for Innovation Grants (Solve the Challenge)
Access To Finance:
Challenge 1: Even though Pakistan has one of the highest rates of mobile technology penetration, the
uptake of digital financial instruments remains relatively low
USAID SMEA invites innovators and technology partners to create a sustainable and scalable
solution which would help increase the uptake of Mobile Wallets and financial technological
innovations to increase SME Access to Finance and mobile payment services across Pakistan,
helping to increase the uptake of formal financial services, in turn encouraging adoption and further
retention of funds. Concept papers/business plan will be judged based on pragmatic solutions,
national scalability and ease of implementation.
Challenge 2: Lack of credit history for SMEs leads to poor credit ratings and limits access to financial
support
USAID SMEA wishes to invite innovators and technology partners who can create a sustainable
and scalable solution which could create a system that captures cash-flow based transactions and
financial positions of Small Businesses to establish credit histories, enabling them to access funding
based on the actual value and turn-over of their business. This would incentivize SMEs to use
more of formal credit facilities to ensure their transactions are recorded and meeting a larger
goal. Applicants who apply in partnership with a Financial Institute will be given greater preference.
Challenge 3: Financial Institutes have a number of lending products for SMEs, however, businesses are
unable to access this funding due to lack of awareness and hesitance to approach the formal sector
USAID SMEA wishes to invite innovators and technology partners who could propose to create
a financial platform or virtual marketplace which would support to aggregate and provide
information on formal financial funding options available for SMEs, providing a one-stop shop for
their financing needs. The focus should be on comparability, eligibility checking and provision of
customized quotes and solutions. This would create awareness for the SMEs regarding available
financial solutions, increase their capacity to access finance from formal institutes and support
their businesses to expand and achieve their growth capacities.
Access To Export Market:
Challenge 4: A large number of industries in Pakistan face difficulty in exports; either due to lack of
understanding of markets, difficulty in being compliant to export market requirements or inability to reach
markets.

SMEA-CF-001 Page 23 of 25
 USAID SMEA invites applicants to propose specific interventions that can increase the exports
for the tourism sector as a part of Hospitality and ICT firms looking to export their products
overseas. Any solutions which can result in increase in exports for SMEs in the sector will be
considered suitable for selection.
ICT:
Challenge 5: Current sales and customer service channels rely heavily on human interaction which are
non-scalable, non-standardized and inefficient. This leads to inconsistent customer service standards and
difficulty to provide extensive knowledge to customers based on their needs, and loss of ability to cross
sell similar products.
USAID SMEA wishes to invite innovators and technology partners to create low cost, human or
computer-assisted solutions to improve customer adoption and digitize interaction channels for
sales and services. The challenge is open to all types of technology, and applicants are encouraged
to propose multiple, front-end channel solutions that can interact with potential customers, learn
from client interactions and deliver standardized yet specific responses related to the customer
needs solutions should be able to be localized to handle native language(s) and should be able to
drive local SME adoption in their businesses. The solutions will be assessed based on ease of
integration and use across multiple channels

Challenge 6: ICT innovations have been radically changing industries and the user interfaces with
businesses worldwide, however, its use and penetration within the sphere of the hospitality sector still
remains from low to negligible in Pakistan.
USAID SMEA wishes to invite innovators and technical advisers who can create ICT solutions for
restaurants, hotels and tour operators to help increase the sales of SMEs, through increased
customer retention and augmented customer experience. In order to scale their businesses in the
digital world, the hospitality sector in Pakistan requires ICT innovation and diversification.
Solutions should be nationally scalable, pragmatic, user friendly and easy to implement.

Challenge 7: Limited understanding of export opportunities, customer needs and actionable market
linkages are limiting the growth of ICT exports in emerging technologies and markets.
USAID SMEA wishes to invite innovators and technical advisors who can propose solutions for
the ICT sector to boost their exports and new market explorations. Considering the supply side
challenges of the ICT workforce in Pakistan, the ICT sector has to focus on the emerging
technologies rather than conventional ones. The emerging technologies are creating new use cases
for industries to address their digital transformation challenges. Local ICT sector needs solutions,
partnering programs, frameworks which can enable the ICT sector exports and increase
responsiveness to market demand.

SMEA-CF-001 Page 24 of 25
Hospitality:
Challenge 8: Lack of reliable information available for hospitality sector (eateries, lodging, travel) creates
friction and decreases customer confidence and retention.
USAID SMEA wishes to invite technical solutions which can provide simple, easy and user-friendly
interfaces for restaurants, tour operators and hotels to provide information to and gather
reviews/ratings by clients to enhance their business and build consumer confidence based on peer
review systems. The content in solution must follow a pattern which is reliable and has all
necessary required information. Solutions must be designed in a way which can attract users and
incentivize them to provide their feedback, reviews and ratings, with a reliable content and
availability of real time information is required.

Challenge 9: Lack of awareness towards alternate tourist destinations and routes, increases demand in
already crowded, famous tourist resorts, diminishing the supply quality, which results in poor customer
experience, eventually decreasing customer base.
USAID SMEA wishes to invite innovators to provide technical solutions which could help manage
and diversify tourist load, promote alternate tourist destination options and facilitate tour planning
by encouraging tourism service providers to provide accurate, up to date and real- time
information. The solutions should allow and incentivize customer contributions; and include a
built-in data analytics system to recommend load distribution among various spots and routes.
Solutions which provide reliable content, availability of real time information, the possibility of
mapping nationwide tourist destinations, and the ability to provide recommendations of new
locations/attractions in the specific tourist areas are preferred.

Women-Led Enterprises:

Challenge 10: Socio-cultural norms, mobility constraints and workplace conditions are some of
the factors that limit women's participation in the workforce in the ICT and hospitality sectors

USAID SMEA wishes to invite applicants to create solutions that would increase the
representation of women in the workforce. Women are observed to be enrolled in
training or degree programs, but many of them either do not enter the workplace or are
not retained for long-term employment. Socio-cultural practices, mobility issues,
unsuitable working environment, etc. are among some of the factors limiting women’s
involvement. Solutions proposed should address some of these constraints and provide
conditions that are commercially viable and practically feasible for both the women and
their employers.

SMEA-CF-001 Page 25 of 25