£125,000 Microfinance Fund launched to boost Scotland’s academic innovation pipeline 

The Scottish Government and Converge have today joined forces to launch a new £125,000 Microfinance Fund aimed at accelerating Scotland’s pipeline of academic start-ups. 

Designed to help students, graduates and university staff take that all important first step towards starting a business, the new initiative will allocate £5,000 to each of Scotland’s 19 universities with grants distributed through university channels. 

In a new development, the scheme will now extend to Scotland’s colleges with a £25,000 prize pot available to support promising projects from the further education sector. 

Building on the success of an earlier pilot, the Microfinance Fund is designed to ignite fresh ideas at the earliest stages of innovation. Earlier this year, the pilot awarded £100,000 in small-scale grants to 55 pre-incorporation projects led by university innovators across Scotland — and it’s already delivering results. 

One standout example is CassioPeia, founded by Dr Szabolcs Pap, a Research Fellow at the University of the Highlands & Islands Environmental Research Institute in Thurso. The project received initial funding through the pilot and went on to win a prestigious IBioIC award and £20,000 cash at this year’s Converge Awards. 

CassioPeia is developing a low-cost, chemical-free filtration system to recover valuable phosphorus from wastewater. Using a carbon ‘sponge’, the technology prevents nutrient pollution while recycling phosphorus back into agriculture — supporting the UK’s net zero and zero-waste ambitions. 

Adam Kosterka, Executive Director of Converge commented: 

The response to our initial Microfinance pilot far exceeded expectations, clearly demonstrating the demand for early-stage support within Scotland’s universities. It’s especially encouraging to see tangible impact already emerging with projects like CassioPeia winning a major prize at this year’s Converge Awards. With this expanded Fund, we’re excited to reach even more innovators—not just in our universities, but across our colleges too.” 

The Microfinance Fund forms part of a wider £700,000 investment by the Scottish Government to strengthen Scotland’s network of entrepreneurial campuses – an investment designed to help universities and colleges embed entrepreneurship into their teaching and culture by making enterprise a core part of the academic experience.  

Minister for Business Richard Lochhead added: 

“Scotland’s universities and colleges remain at the heart of our innovation ecosystem. Their global reputation is built on a legacy of transformative ideas, and they continue to inspire new generations of entrepreneurs and changemakers.” 

“By expanding this microgrant initiative to include the college sector, the Scottish Government is strengthening its support for young people with ambition and creativity. I am pleased that even more individuals will be empowered to take their first steps toward building businesses and social enterprises that can make a real difference.”