1. About the AECF

The Africa Enterprise Challenge Fund (AECF) transforms lives by providing investment funding and technical assistance to commercially viable businesses that improve the lives of rural communities. It mobilizes donor funding to support early and growth-stage businesses in agriculture and renewable and clean energy sectors, with a focus on improving incomes and employment for rural and marginalized groups. It is a non-profit organization, with its headquarters in Nairobi and operational centers in Somalia, Ethiopia, Dar-es-Salaam, Mozambique, Nigeria, South Sudan, and Côte d’Ivoire.

Since our launch in 2008 at the World Economic Forum, AECF has built the resilience of rural and marginalized communities by catalyzing innovative private sector business models with patient capital and growth support services across Sub-Saharan Africa.

1. About the FIG programme

Funded by the European Union, FIG is a component of the Inclusive Local and Economic Development (ILED) programme, whose objective is to revitalize and expand the local economy with a focus on livelihood enhancement, job creation, and broad-based inclusive growth for Somali women, youth and producers through:

• Designing and offering appropriate and sustainable financial products and services to clients through Somali Financial Institutions (FI) and ensuring targeted clients are growing and becoming more bankable.
• Catalyzing sustainable increase in lending to economic actors in Somalia, esp. youth, women, and producers.
• Building the capacity of the partner financial institutions to increasingly provide appropriate financial services for a wider scope of customers living in urban centres, and rural and decentralized areas in Somalia.
• Building the capacity of targeted end clients to profitably use the financing for business growth.

1. Purposes of the Consultancy.

MFIs in Somalia offer principally Marhaba based funding for micro enterprises that whilst Sharia compliant is expensive. With a focus on financing a limited number of sectors, they also require collateral that is frequently beyond the capacity of vulnerable groups such as women and youth to provide. The FIG programme is designed to support MFIs develop new products that are more accessible to marginalized groups, improve the efficiency of their operating systems to simplify procedures and increase access and make borrowers better able to manage their financial obligations. To achieve this, AECF aims to strengthen the institutional capacity of its four partner MFIs through initiatives that will support both the ability of the MFIs to train borrowers in financial literacy and business management and the improvement in their own internal operating procedures, capacity and product offerings. This includes the development of training courses and manuals followed by comprehensive training for a total of 60 staff members to serve as trainers (TOTs) who will subsequently be able to transfer knowledge to end clients. The chosen service provider will also support the MFIs in designing innovative financing products for women, youth, and producer groups. The consultant will conduct a market assessment, develop an implementation and sustainability model, and create three unique products for each MFI, resulting in a total of twelve new financing options. Additionally, the consultant will refine existing policies and procedures of the MFIs, develop missing ones, and create coaching manuals for loan officers to support their clients.

1. Scope of the consultancy:
   • Work closely with the MFIs to assess their current product offerings and identify opportunities for new financing products targeting women, youth, and producers.
   • Conduct market research and feasibility studies to determine the demand and viability of the proposed financing products.
   • Develop innovative and inclusive financing products that meet the needs of the target segments.
   • In collaboration with the partner MFIs develop 12 financing products (3 per MFI) specifically designed for women, youth, and producer groups.
   • The products must have distinct and implementable features to meet the unique needs of each target group with meaningful and attractive names that reflect their purpose and benefits.
   • Assist in designing appropriate loan terms, repayment schedules, profit rate mechanisms, and guarantor requirements for the new products.
   • Develop a comprehensive strategic plan for the rollout of new products across all branches, outlining the necessary steps and timelines for successful implementation.
   • Collaborate closely with branch managers to monitor and support the execution of the rollout plan, ensuring consistent and effective implementation throughout the MFIs.
   • Conduct programme partner MFIs capacity gap assessments and develop corresponding products and institutional development plans.
   • Review the existing policies and guidelines of the MFIs and identify gaps or areas for improvement.
   • Develop comprehensive policies and guidelines that align with sector best practices and regulatory requirements based on institutional gap analysis findings.
   • Develop and improve comprehensive documentation, including policies, procedures, process flow charts, financing loan applications, MF level of authorities, risk management protocols, client protection guidelines, governance frameworks, loan approval matrices, recovery strategies, marketing plans and product development plans.
   • Provide guidance, monitoring, and support in implementing the newly developed policies and guidelines within the MFIs.
   • Restructure the MFI loan approval matrix, loan recovery plans and risk management guidelines.
   • Conduct a comprehensive review of the existing credit manual, internal audit processes, and IT infrastructure of the MFIs, and implement necessary improvements where required.
   • Develop a robust financing risk management policy that outlines strategies and procedures for identifying, assessing, and mitigating financial risks, ensuring organizational stability and sustainability.
   • Organize a workshop to present the final microfinance unit documents to senior management and the MF unit teams.
   • Conduct a comprehensive training needs assessment for MFI staff members, identifying gaps and areas for improvement.
   • Develop a detailed training plan and develop a curriculum based on the needs of the MFI staff to address the identified needs.
   • Conduct training sessions and workshops for 60 MFI staff members (15 per each) to enhance their understanding and implementation of the developed policies, guidelines, financing products and the sector’s best practices.
   • Provide ongoing technical assistance and mentoring to the MFIs to ensure effective implementation of the training programmes, product development, and policy guidelines.
   • Transfer knowledge and build the capacity of the MFI staff to sustain the training initiatives, product development, and policy guidelines in the long term.
   • Ensure trained loan officers effectively transfer their knowledge to the end clients and provide necessary support by putting in place implementation and monitoring plans.
   • Develop user-friendly tools/coaching tools to facilitate staff members in effectively handholding the end clients.

AECF is seeking to engage a highly qualified consultant firm or individual with extensive expertise in microfinance institution staff training programmes, the development of financing products targeting women, youth, and producers, and the formulation of MFI policies and guidelines in Somalia.

1. Financing Product Development:
2. Institutional development (Policies and Guidelines Development):
3. Training Needs Assessment and Capacity Building:
4. Developing MFI staff training manual and end clients’ coaching tools.

• Enhance and standardize existing training modules, transforming them into comprehensive training courses accompanied by trainee manuals.
• Create an end clients’ coaching toolkit to support effective coaching and guidance for MFI clients.

1. Timeline and Deliverables

The assignment will span over 12 months, from [June 2024] to [May 2025]. (Please note this is dependent on when the contract is signed and may be adjusted accordingly.) The following deliverables will be produced:

• Inception report: A report confirming the assignment delivery methodology, and updated work plan to be submitted within one week of the contract’s signature.
• Report: A Comprehensive report detailing each milestone completed with evidence of the completed assignments to be submitted.
• Final report: A report incorporating feedback from the AECF to be submitted within one week of receiving feedback on the draft report with attachments of all developed policies, products and training tools.

1. Qualifications

The consultant firm/team must meet the following requirements:

1. Possess significant experience (minimum of 5 years) in conducting similar assignments in Somalia’s financial sector, including training needs assessments, tailored training programmes, and financing product development.
2. Have proven experience in providing training and capacity-building services to MFIs, particularly in staff training, financing product development, and policy and guideline development.
3. Demonstrate strong knowledge of training methodologies, curriculum development, adult learning principles, and expertise in policy and guideline development for MFIs, including familiarity with regulatory requirements and industry best practices.
4. Exhibit strong project management skills, including the ability to meet deadlines and deliver high-quality outputs.
5. Possess a comprehensive understanding of the Somali private financial sector, including in-depth knowledge of the Somali microfinance landscape, regulatory frameworks, market dynamics, and challenges faced by MFIs.
6. Be independent and free from conflicts of interest that could compromise the objectivity of the assignment, ensuring the ability to conduct the task objectively and impartially without influence from relevant stakeholders.
7. Have excellent communication and facilitation skills to effectively engage with Somali MFI staff members and stakeholders.
8. Previous experience working with EU-funded similar programmes is advantageous.
9. Be fully able to operate registered as a consultancy firm in Somalia.
10. Proposal Submission

• Interested applicants should submit a full proposal as a response to the TOR.
• CVs of all team members
• A proposed methodology for the assignment
• A proposed work plan with timelines and activity breakdown.
• Technical and financial proposals must be submitted separately.
• Detailed financial proposal in USD

1. REPORTING

The consultancy firm/team will report to AECF, the FIG programme manager.

1. PRICING

Depending on the contracting mechanism, AECF is obliged by the Kenyan tax authorities to withhold taxes on service contract fees as well as ensure VAT, at 16%, is charged where applicable. Applicants are advised to ensure that they have a clear understanding of their tax position concerning provisions of Kenya tax legislation when developing their proposals.

1. EVALUATION CRITERIA

An evaluation committee will be formed by the AECF and shall include employees. All members will be bound by the same standards of confidentiality. The vendor should ensure that they fully respond to all criteria to be comprehensively evaluated. The AECF may request and receive clarification from any vendor when evaluating a proposal. The evaluation committee may invite some or all the vendors to appear before the committee to clarify their proposals. In such an event, the evaluation committee may consider such clarifications in evaluating proposals.

In deciding the final selection of qualified bidders, the technical quality of the proposal will be given a weighting of 70% based on the evaluation criteria. Only the financial proposal of those bidders who qualify technically will be opened. The financial proposal will be allocated a weighting of 30% and the proposals will be ranked in terms of total points scored. The mandatory and desirable criteria against which proposals will be evaluated are identified in the table below.

No.

Criteria for Assessment

Marks

1

Understanding of the terms of reference

10

Detailed description of the service to be provided

5

Understanding of what AECF is expecting from the assignment

5

2

Methodology and work plan

20

Relevance of the methodology proposed to the needs of the assignment

10

Adequacy of the work plan, including key deliverables and capacity to deliver within a realistic timeline based on the consultancy days designated for the task

10

3

Technical experience of staff offered

40

Relevant tertiary level qualification and years of professional experience of the proposed team; and demonstrated Team Leader’s expertise in one of the technical areas as well as expertise and demonstrated experience in delivering the assignment, methodology and implementation approach and demonstrated experience in leading similar assignments.

5

Prior experience in conducting MFIs technical support activity in Somalia with similar nature and scope; including reference list indicating the scope and magnitude of similar assignments.

10

Experience in working with donor-funded programmes including demonstrated experience in technical assistance delivery report writing.

10

Evidence of similar previous experience, at least 5 years, in the banking and financial inclusion sector in Somalia. Provide at least three assignment details with reference and contact details.

15

4

Financial Proposal

Clarity, relevance, reality to market of value/value for money of cost for the assignment (inclusive of any applicable tax)

30

Total Score

100

1. DISCLAIMER

AECF reserves the right to determine the structure of the process, the number of short-listed participants, the right to withdraw from the proposal process, the right to change this timetable at any time without notice and reserves the right to withdraw this tender at any time, without prior notice and without liability to compensate and/or reimburse any party.