• Low uptake (for example, in another project, 45 percent of funds were disbursed by the end of the project) • Problems with eligibility criteria that were either too strict and excluded firms that could benefit or too lax so participating firms were not selected well • Complex processing and reimbursement procedures that caused cash flow problems in firms • Rigid donor budgetary and procurement processes that caused delays in start-up • Political interference that may have led to frequent changes in management • Unfavorable macroeconomic conditions that created uncertainties for private sector investments. These design and implementation challenges have meant that even when firms do get funds from matching grants, a large number of them do not proceed with the activities that were proposed. Some interventions combine different mechanisms to implement innovation and entrepreneurship interventions. Box 4.1 provides an example of matching grants combined with competitive research grant to develop and commercialize new technologies that are having impact in those societies.
BOX 4.1 Harnessing Innovation for Improving Access to Electricity in Rural China
Geographically isolated rural populations in western regions of China faced a severe lack of access to electricity in the late 1990s, which inhibited their ability to reduce poverty and improve life. Solar home systems and small off-grid solar stations (collectively, PV systems) offered a potentially promising solution. But the industry was nascent, with low quality and high prices. This affected affordability and hampered demand. continued on page 80
An Independent Evaluation | Chapter 4
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