Country: Ethiopia
Closing date: 30 Jun 2015
Position – Consultancy to develop new agricultural loans products
About DAI
DAI is an employee-owned global development company. For 40 years, we have worked on the frontlines of international development, tackling fundamental social and economic development problems caused by inefficient markets, ineffective governments, and instability. Currently, DAI is delivering results that matter in some 60 countries. Our integrated development solutions turn ideas into impact by bringing together fresh combinations of expertise and innovation across multiple disciplines—crisis mitigation and stability operations, democratic governance and public sector management, agriculture and agribusiness, private sector development and financial services, economics and trade, HIV/AIDS and disease control, water and natural resources management, and energy and climate change. Our clients include international development agencies, international lending institutions, private corporations and philanthropies, and national governments.
Objective of the Programme
The Land Investment For Transformation (LIFT) Programme is a 6.5 years to August 2020, DFID funded programme that aims to improve the incomes of the rural poor and to enhance economic growth, through three components: The development of second level land certification (SLLC); improved rural land administration; and the development of rural land systems following the ‘making markets work for the poor’ (M4P) approach. The M4P component aims to implement a number of complementary interventions to ensure that the benefits of second level certification are maximised and operates in three sectors: rural land rental; access to credit; and environment and conservation in the agriculture market.
In late 2014, the M4P team undertook a market assessment in Amhara and Oromia region to identify the main constraints affecting the poor in each of the three sectors and identified a number of interventions. Within access to credit, there are four interventions:
- Intervention 5 - Promote development of new agricultural individual loan products linked to SLLC,
- Intervention 6 - Promote development of new products in agricultural finance (credit related),
- Intervention 7 - Promote partnerships in finance to overcome risk and market limitations, and
- Intervention 8 - Improve knowledge and information on supply and demand of rural financial services.
This ToR contributes to the implementation of intervention 5 - Promote development of new agricultural individual loan products linked to SLLC.
Scope of Work
At present, MFIs in Ethiopia typically provide credit in the form of group loans, which means that often the size of loans are insufficient for all the investment needs of farmers. This is mainly due to the fact that smallholder farmers are unable to provide sufficient collateral as land, which is the main asset owned by smallholder farmers (i.e. it is the property of the peoples of Ethiopia with farmers only having “right of use”). It is also the case that MFIs are not using methods available to provide individual based loans to smallholder farmers such as cash-flow-based techniques and the use of farm produce as collateral. As a result, the risk of awarding individual-based loans to farmers remains very high and farmers cannot access the size and number of loans required.
The purpose of this role is to promote the development of new agricultural individual loans products that will increase smallholder farmer’s access to credit. The contracted consultant will provide technical assistance to two MFIs (ACSI in Amhara and OCSSCO in Oromia) to develop these new products that will allow farmers to access credit on an individual basis (i.e. they do not need to be part of a group).
One of the new loan products to be developed will focus on using the produce of land as collateral. ACSI has already developed some systems to implement such a product and the consultant will be required to work together with ACSI to review and improve these systems. In the case of OCSSCO, the consultant will be required to support OCSSCO in setting up the new system in its entirety.
The consultant will also assist the selected MFIs to roll out the new loan products on a pilot basis in four selected Woredas (two in each Region).
The consultant’s approach to the assignment must be inclusive, participatory, encourage stakeholder ownership and work closely with the LIFT M4P Co-ordinator and Regional Facilitators, as well as the Land Administration staff at the Federal, Regional, Woreda and Kebele levels.
Duties and Responsibilities
The key activities for this assignment are:
· Conduct an in-depth assessment of the constraints and challenges faced by selected MFIs to expand their loan products to smallholder farmers, including vulnerable groups.
· Assess the demand for agricultural-related credit from smallholder farmers and vulnerable groups
· Review ACSI’s systems for making loans based on the produce of the land and provide recommendations on how to improve these systems.
· Provide support to OCSSCO to develop the systems for making loans based on the produce of the land.
· Work with ACSI and OCSSCO to identify at least two other individual loan products that could be implemented to increase access to credit by smallholder farmers (e.g. cash-flow based lending).
· Develop a business plan for the implementation of the new credit systems (including required budget, activities, work plan and expected results).
· Support the selected institutions to run a pilot to test the development and implementation of these new products.
· Evaluate the effectiveness of the pilot for each new loan product, including recommendations on how to improve their effectiveness or whether they should be terminated.
Milestones and Timeframe
Timescale: August 2015 – May 2016 (maximum of 100 days)
Timing of Inputs:
The selected consultant will initially undertake a three to four week-long visit and produce an action plan in consultation with the LIFT M4P Coordinator, ACSI and OCSSCO.
It is then expected that the consultant will then undertake roughly 4-5 trips of 3 weeks in length with the remaining time being home based.
The selected consultant(s)/consulting firm(s) will be expected to deliver the following:
No.Outputs/deliverables Indicative due date 1. Assessment of constraints faced by selected MFIs to expand the number of loans to smallholder farmers and identification of feasible new/innovative loan products to be adopted End of September 2015 2. Detailed support plan for ACSI and OCSSCO to improve/implement the loan system that will use produce of land as collateral. End of September 2015 3. Design plans for introduction of additional new loan products End of October 2015 4. Pilot to implement new loan products undertaken and results documented End of April 2016 5. Final report of the assignment (including evaluation of the effectiveness of the pilot) approved. End of May 2016
Qualifications
The following are the required competencies and qualification requirements of the consultants:
- At least 10 years professional experience in the field of SMEs finance.
- Technical experience in developing MFI operational, organisational, financial and management policies and procedures based on international accepted MFI best practices.
- Good knowledge of the Ethiopian banking and MFI sectors, including on the institutional and regulatory environment, particularly with regards to SMEs financing.
- Working experience in Ethiopia and good knowledge of the Ethiopian agribusiness sector is an advantage.
- Strong ability in building capacity of national staff and board members of microfinance programs/MFIs through training, coaching and mentoring.
- Excellent skills in spoken and written English will be required.
Programme Duration:
6.5 years
Programme Start Date:
March 2014
Application Deadline:
30th June 2015
All submissions are required to submit the following documentation:
· CV(s) of consultant(s) who will be undertaking the assignment.
· Shortlisted candidates will be require to provide a brief technical proposal showing understanding of the assignment, methodology for the implementation, composition of the team, work plan, level of effort required to complete the assignment.
Requests for clarification:Any request for clarification must be sent by email to the LIFT M4P Coordinator - Christian Portal (cportal@htspe-team.com) and copied Ignacio Fiestas (ifiestas@nathaninc.com).
How to apply:
Please apply via the following link:
http://chc.tbe.taleo.net/chc06/ats/careers/requisition.jsp?org=DAINC&cws=1&rid=2105