The goal of this fund is to support innovative research that is in line with the Program’s objective to build a body of evidence on the effectiveness of programs and policies that promote SME growth. Funding will be allocated competitively to projects that address innovative research questions, use rigorous methods, and have the utmost policy relevance in the areas outlined below.

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SME Program Research Focus Areas

The three key research areas of interest for the SME Program are:

  • Access to Finance
  • Human Capital and Skills
  • Access to Markets and Information

In addition, there are three cross-cutting themes that are relevant to each of our research areas: economic growth, poverty alleviation & job creation, and social empowerment & gender.  

Special Research Focus Areas for the 10th Round

High-growth entrepreneurship in Latin America. The Multilateral Investment Fund of the Inter-American Development Bank (MIF/IDB) has provided generous support for research focused on high-growth entrepreneurship in Latin America. These studies will contribute to existing knowledge about fast-growing small and medium enterprises and examine policies that identify and support them. Examples of key questions in this area include: what are the most important factors that accelerate or restrict growth of transformational[1] enterprises; how to identify these enterprises and whether they should be a focus of SME policies; how to address financing requirements of growing young enterprises; what impact do accelerators and other types of support have on growth of these enterprises; and how and why transformational entrepreneurs are able to create jobs, especially in economic downturns, declining industries and depressed economic regions.

Lowering the risk and cost of lending to SMEs. Studies in this category will evaluate innovative mechanisms that reduce the risks and costs associated with lending to SMEs.  Specific mechanisms can focus on reducing the cost of due diligence, increasing the efficiency of the decision-making process, improving the reliability of screening mechanisms, accepting non-traditional forms of collateral, relationship lending or other approaches to reducing the likelihood of default, innovative product designs, or any other means of minimizing the risk and burden associated with lending to SMEs and entrepreneurs.

Improving managerial capital through training, consulting, or mentoring. Proposals in this category should build off of the existing literature in the field. Studies should either evaluate a truly innovative program or contribute to the identification of an underlying mechanism.

The Competitive Research Fund has three award levels:

  • Core Research: These grants are for research projects at a mature stage of development. Not only must the research question be clear and policy-relevant, but applicants must also demonstrate a commitment from implementing partners, a solid identification strategy, a data collection plan, and sample size estimates. The maximum award size in this category is $100,000.
  • Project Development: Seed grants to cover the initial costs of starting a new research project. This award level is for studies that have a clear, policy-relevant research question but require further testing and pilot data, a baseline survey, a feasibility study, and/or fact-finding trips. The maximum award size in this category is $25,000.
  • Young Scholar: With the generous support of the Ewing Marion Kauffman Foundation, this grant level funds young scholars interested in the SME field. The award is expected to attract untenured professors and advanced graduate students to the field, involve them in the SME Program, and support the development of their work and ideas. The maximum award size in this category is $20,000.

Please direct all questions related to the RFP to sme-fund@poverty-action.org.

 


1. Subsistence entrepreneurs run micro businesses for the sole purpose of earning income to cover basic personal and family expenditures. In contrast, transformational entrepreneurs are generally larger business owners with goals of growing and expanding their firms, and provide relatively secure employment opportunities for others.