Rural and Informal Skills Fund
APPLICATION GUIDELINES
Background
1. The International Labour Organization (ILO) is a member of the United Nations family of
organizations or agencies. The ILO is a unique and specialized UN agency in that it is a tripartite
organization in which each country or member state is represented by its government, workers
and employers organizations in common action to promote social justice and decent work
throughout the world. At global and national level, the ILO agenda therefore reflects the agenda of
its member states and their Social Partners. Its headquarters is in Geneva, Switzerland where
ILO member states convene in June each year for the International Labour Conference (ILC)
which determines the mandate of the ILO.
2. The primary goal of the ILO today is to promote opportunities for women and men to obtain
decent and productive work, in conditions of freedom, equity, security and human dignity. Decent
and productive work is defined by four inter-related and mutually supportive objectives:
employment opportunities, rights at work, social protection and dialogue. These objectives
constitute the strategic objectives of the ILO today.
Introduction
3. The Skills for Youth Employment and Rural Development Programme is a 5 year partnership
between the ILO and the Danish Africa Commission which is supporting the social partners in
Zimbabwe (Benin and Burkina Faso) – government, trade unions, employers and civil society
organizations – to address the challenges of youth employment and rural development. The
development objective of the ILO Skills Programme is to strengthen skills development systems
that improve employability, promote access to employment opportunities and increase incomes
for inclusive and sustainable growth.
4. The immediate objective of the Skills Programme for the period 2010 – 2014 aims to achieve
quality improvements in traditional apprenticeships in the informal economy, and market driven
community-based technical and vocational skills development in rural areas to close the skills gap
and equip more young women and men in the informal and rural economy with skills that will
improve their employability in more productive and decent work.
5. The skills training strategy focuses broadly on two main areas of action: 1) introducing the ILO’s
Training for Rural Economic Empowerment (TREE) methodology in rural communities, and 2)
improving the Quality of delivery of training in Informal Apprenticeship (QIA) in the informal
economy. The post-training strategy includes making microfinance and business development
service markets work for youth and their self-help groups or cooperatives. And in order to ensure
local ownership and sustainability, national and local stakeholders are trained and actively
engaged in the design and implementation of the programme tools and methodology.
6. In addition, the programme approach pays attention to value chains and assures clear roles for
the private sector – for example farmers’ organizations, input suppliers, warehouse operators,
buyers, traders, and manufacturers are involved in skills training as trade or industry experts.
Evidence suggests that once the subsistence requirements of the producers’ families and local
communities have been met, there are three main sources of demand: export markets
(international and regional), domestic urban markets, and food processing. As such, the
involvement of the private sector is vital to facilitate access to high value markets.
7. By the end of 2014, the number of beneficiaries who are in employment, either wage-employed or
gainfully self-employed, or who have increased their income is expected to reach 4,480 (70% of
the total beneficiaries) with 2,380 from the TREE project and some 1,400 apprentice graduates
and 700 master craft persons from Informal Apprenticeship project.
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What is a Challenge Fund?
8. A challenge fund is an open financing mechanism that allocates grants through a competitive
process. Grants are provided to meet specific and measurable objectives. Bids are assessed
against transparent criteria, and successful bidders must utilize and revolve the grant amount to
expand products and services to previously disadvantaged groups such as youth and women
create pathways out of poverty and vulnerability in both rural and urban communities. A Selection
Committee then awards grants to those projects that best meet the aims of the Fund.
About the Skills Fund
9. The Skills Fund is a grant which enables youths and craftpersons who normally lack collateral
security to access credit and related services from local commercial providers such as registered
and reputable Microfinance Institutions and Banks.
10. The first objective of the Skills Fund is to make microfinance markets work for youth by facilitating
post training access to group and individual business loans for graduates seeking self
employment under the TREE and QIA projects. It is intended to help youth savings and credit
cooperatives and self-help groups to regenerate. The second objective of the Fund is to assist
Craftpersons to access markets, working capital, appropriate tools and improve their work
practices for better business which in-turn creates demand driven informal apprenticeship and
wage employment opportunities for youth.
11. In May 2011, the ILO Skills for Youth Employment and Rural Development Programme is
launching a single call for proposals for the Skills Fund from commercial [Banks and Microfinance
Institutions] and non-commercial entities [qualified NGOs , appropriate public institutions,
cooperatives and other non-profit entities]) legally registered and operating in Zimbabwe. Three
projects will be selected on a competitive basis from applications received and to each will be
awarded a grant not exceeding US$150,000.
12. A local as well as International Selection Committee will make recommendations for the award of
grants to those project applications which best meet the aims of the Fund. The recommendations
will be based on set selection criteria and appraisal from experts. The selection committee
reserves the right to award more or less the stated amount depending on the quality of the
proposal.
Below are some examples of projects that could be supported using the grant

A youth producer group or cooperative wanting to improve irrigation schemes, access to agricultural inputs, business
services and working capital for its youth members training for rural economic empowerment to tap into viable local
economic opportunities that have been identified.

An association of craftpersons for its members to improve their business and in turn create wage employment and better
quality informal apprenticeship opportunities for youth. This could include improving production processes and workplace
practices (including new designs), working capital requirements such as order financing, invoice discounting and
overdrafts, meeting capital requirements for new tools, alternative power source etc.

An individual youth who after successfully completing informal apprenticeship seeks asset and working capital finance to
start their own business.
Possible Selection Criteria for youth and craftpersons’ projects



Target beneficiary of the ILO Skills programme youth aged 18 – 35 years or Craftpersons who are participating in the
programme with relevant technical and production skills.
Self selected groups of youth and craftpersons must comply with the cooperative principles, (voluntary and open
membership; democratic member control; member economic participation; autonomy and independence; education,
training and information; co-operation among co-operators; concern for community) and cooperative values (self-help,
self-responsibility, democracy, equality, equity, solidarity and the ethical values of honesty, openness, social responsibility
and caring for others).
Youth and craftpersons projects must be commercially viable and sustainable based on under-met, unmet and growing
market demand attractive for private sector investment and value chain development.
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Who can Apply?
13. Eligible Applicants for the grant are local commercial [Banks, Microfinance and other private
Institutions] and non-commercial entities [qualified NGOs, appropriate public institutions, youth
cooperatives and other non-profit entities]) legally registered and operating in Zimbabwe.
14. Applicants must have a good track record in microfinance especially for youth and women
cooperatives or groups with a presence or an outreach in Bulawayo, Chitungwiza, Gokwe South,
Harare, Marondera, Mutoko, Mount Darwin and Norton.
Proposals
15. In addition to the application and budget forms, Applicants are expected to provide the following
information in/with their proposals in order to be considered as a grant beneficiary.
i.
Proof of registration and track record. At least a certificate of incorporation (commercial) or
registration (non commercial); business plan; capability statement including key staff and
relevant experience; and financial statement (audited) of the previous year should
accompany the proposal. Previous work with the ILO or UN will be an added advantage.
ii.
Level of effort or in-kind contribution. Applications should include the use of equipment,
offices and level of effort by the beneficiary quantified and acknowledged as in kind
contribution.
iii.
Target beneficiary (youth and craftpersons) loan size, tenure and interest rates.
Proposal should state the proposed loan size, tenure, outstanding balance and penalty
interest per given period.
iv.
Fees, commission and other charges. 2% of the grant amount (minimum $2,000) should
be reserved for monitoring and evaluation of projects funded. The proposal should state the
Fees, Commission and other charges to be charged to the borrower in addition to the
interest rate. Mandatory savings reserve or hold amount or any other charges to be
deposited by the youth or craftpersons seeking the loan prior to approval should be stated.
v.
Interest or returns on grant. Applicants should acknowledge that any interest or any form of
return on high yielding investments from the grant will be recapitalized. Grants will not be
used for equipment, salaries, vehicles, training, etc. for internal staff members of the
beneficiary unless it clearly demonstrates its usefulness in implementing the fund.
vi.
Geographical coverage and outreach to target group. Applicants should spell out their
geographical coverage and outreach to target group. Where the applicant does not have a
point of presence measures to be taken including implementation partners must be given.
vii.
Orientation training. Some of the entrepreneurs and youth in the informal and rural
economy will be first time borrowers. The applicant should specify orientation training e.g. on
savings and borrowing or any other business development services they will provide to
compliment access to microfinance.
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Key Selection Criteria
16. Among others, the following selection criterion will be considered. Each selection criterion is given
a specific value on a scale of 100 points. The applicant project which scores the highest marks
against all criteria is recommended for selection. The selection process is conducted on a
consultative basis involving all stakeholders.
i.
Proposal fulfills the objectives of the Skills Fund
ii.
Internal capacity and capability to reach and service entrepreneurs and youth in the informal
and rural economy, especially those in the programme areas.
iii.
Previous relevant experience and track record in working with informal sector trade
associations, youth and women self-help groups.
iv.
Potential to sustain and improve microfinance services to entrepreneurs and youth in the
informal and rural economy after the project has ended.
v.
Sound business and financial management practices.
Selection Procedure
17. At the country level, the National Steering Committee (NSC) and Technical Working Group
(TWG) receives and assesses all proposals based on guidelines and selection criterion;
evaluates (including by applicant visits and consultations with beneficiaries) and ranks all project
proposals; and submits to the International Selection Committee (ISC) 5 top proposals with
recommendations.
18. At the international level, ISC assesses all 5 project proposals for final decision on 3, based
upon the national recommendations and their own independent assessment.
19. Feedback to the applicants:
o
ISC communicates to NSC and TWG their final decision on the 3 winning proposals.
o
As the Secretariat of the NSC and TWG, the ILO communicates to beneficiaries, the
final decision including those applications that were not successful. This
communication will include grant agreement and financial reporting templates (annual
cashbook, expenditure and status of funds forms).
Timeline for the application process
20. The timeline for the application process is as follows

6 June: Launch of the Call

30 June: Deadline for Submission of proposals by applications

10th July: Submission of all proposals and recommendations by NSC/TWG based on criterion
and interviews.

31th July: Completion of appraisal of recommended applicants by the ISC.

15th August: Completion of contractual arrangements with selected applicants

22nd August: First disbursement to beneficiaries. 1st November: Second disbursement to
beneficiaries based on progress report.
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