Raising capital in emerging countries' ecosystems has always been a significant pain for entrepreneurs and startups. Formal financing avenues don't see entrepreneurial projects as viable credit clients, denying the access support. Against, this backdrop, networks of angel investors and VCs are developing as the pool of ventures improves over time. This reality set the context for the introduction of "Fondo CONFIE" which serves as financial support in a loan structure with incentives for early repayment.
The "Fondo de Contrapartida Financiera para Desarrollo del Emprendimiento, or Fondo CONFIE" brings to the ecosystem an incentive and method through which startups and micro-enterprises are forced to improve planification, embodied in the process they need to follow in order to access the funds.
The introduction of the fund also contributes to the professionalization of organizations that support startups because the fund will support programs that help entrepreneurs in securing funding.
- Ministry of Industry, Commerce & MSMEs (public sector)
- Nationa Entrepreneurship Network (civil sector)
- Fondo CONFIE Council (independent body)
In order for startups and microenterprises receive financial support from Fondo CONFIE, entrepreneurs must:
- Demonstrate they have internally secured 10% of the requested funds. This is seen as evidence that they have skin in the game.
- Get the approval of a bank that would be willing to lend 20% of the requested funds to the startup.
- Present the business plan in the official format of the fund.
If the applicant can demonstrate that the business at hand can be profitable that fund will concede a loan at a four year term where the first 18 month are free of payments.
Each time the application period open ups entrepreneurs will have around 20 days to apply and will be able to receive the funds 15 days after the application has been closed.
The baseline for the Funds' performance evaluations is the business plan delivered by entrepreneurs.
The main challenge we expect to encounter are frictions during the process in which entrepreneurs must complete all the steps. Since this is the first time this fund goes public we will learn much about the user experience, and expect to adjust this instrument accordingly.
- Jose M. Checo, Entrepreneurship Director, Ministry of Industry, Commerce & MSMEs (MICM)
- Rubi R. Breton, Head of Innovative Business, MICM
- Alan Fernadez, Head of Mindset Development, MICM
- Patricia Acosta, Head of Entrepreneurial Ecosystem, MICM