Consultant for Review Of Microfinance Operational/Business Processes Using Digital Field Application (DFA) Solution

TERMS OF REFERENCE | BRAC International Holdings B.V.

Review Of Microfinance Operational/Business Processes Using Digital Field Application (DFA) Solution

About BRAC and BRAC International Holdings B.V

BRAC was established in 1972 after the independence of Bangladesh and currently operates in all 64 districts in the country, providing services to millions. BRAC aims to achieve large-scale positive changes through economic and social programmes that enable men and women to realise their potential. It provides services in the areas of human rights and social empowerment, education and health, economic empowerment and enterprise development, livelihood training, environmental sustainability, and disaster preparedness.

Stichting BRAC International (BI) was legally registered in the Netherlands since 2009 as a non-profit foundation to govern and manage all BRAC entities outside Bangladesh, except its fundraising affiliates (BRAC USA and BRAC UK). BRAC International Holdings B.V. (BIHBV), a wholly-owned subsidiary of Stitching BRAC International, is a socially responsible for-profit organisation, engaging people in sustainable economic and income-generating activities. BIHBV’s core focus is to provide microfinance services to people who are financially constrained and marginalised, and who do not have access to financing facilities offered by banks and other non-bank financial institutions.

BIHBV mission is “To provide a range of financial services responsibly to people at the bottom of the pyramid. We particularly focus on women living in poverty in rural and hard to reach areas to create self-employment opportunities, build financial resilience, and harness women’s entrepreneurial spirit by empowering them economically.” Our microfinance operations currently reach over 800,000 clients, primarily women living in poverty in rural and hard-to-reach areas, in seven countries: Myanmar, Liberia, Sierra Leone, Rwanda, Tanzania, Ghana and Uganda. As of June 2023, 96% of its clients are women, 57% live in rural areas, and 70% are living in poverty.

Please visit www.bracinternational.org for more details.

Project Overview and Objectives

BIHBV is looking for qualified consultants or a consulting firm to conduct an operational review of our digitised microfinance processes. Presently, our microfinance processes in three countries—Rwanda, Liberia, and Ghana have been digitised using a Digital Field Application (DFA) solution. The DFA solution was rolled out in Rwanda, Liberia and Ghana in 2019, 2021 and 2023 respectively, and comprises a customised smartphone-based app and web-enabled IT solutions to manage our microfinance field activities. To effectively serve our target clients (women particularly in rural areas), the DFA solution has offline capability to enable our front-end staff work in rural and hard-to-reach areas with no or very limited internet connectivity. The following front-end microfinance processes/aspects are currently conducted using DFA:

• Household Survey/Market Survey
• Client onboarding and Approval
• Group meeting management
• Client follow-up and training
• Loan application and approval process
• Savings and loan repayment collection from the field.
• SPM reporting (social performance and poverty tracking)
• Key operational reporting for front-line staff

In Rwanda and Ghana, DFA is seamlessly integrated with a core banking system – Temenos Financial Inclusion Suite. In Liberia, the DFA solution is integrated with an ERP system. However, BRAC Liberia is in the process of implementing CBS and the DFA solution will be seamlessly integrated with the CBS by the end of this year. Similarly, our entities in Uganda, Tanzania, Sierra Leone, and Myanmar have plans to roll out DFA in 2024/2025.

Our key objectives for implementing the DFA solution is to.

1. Enhance efficiency and staff productivity through the elimination/reduction of paper-based front-end processes. This includes the elimination of steps/processes that become redundant as a result of digitalization.
2. Improve turnaround time (TAT) for credit and savings processes
3. Realise cost savings through the implementation of streamlined, digitised microfinance field processes
4. Improve data quality and data analytics. Using the digital field application and other platforms we aim to improve our data driven decision-making at all levels – strategic and operational level. Through these platforms, key staff and management have access to relevant reports and dashboards that can enhance the business decision making process
5. Leverage data collected using DFA and other IT platforms for credit scoring in future
6. Enable our clients (particularly women living in rural areas) have a better customer experience through faster TAT and access to financial solutions that are tailored to meet their financial and non-financial needs

In this regard, we would like the in-depth review of our microfinance processes to focus on our field operations that are enabled by the Digital Field Application in Rwanda and Liberia. BRAC Rwanda Microfinance Company PLC commenced its operations with the Digital Field Application while BRAC Liberia Microfinance Company Ltd had used paper-based field operations for more than 10 years before transitioning to using DFA in 2021.

In line with our key objectives stated above, we would like to conduct an in- depth review of our digitised front-end microfinance processes to identify opportunities for business process improvement and streamlining to enhance organisational efficiency and operational excellence. Given the current DFA functionalities and future business needs, we would like to understand how we can optimise the use of DFA to continue to transform our front end processes in order to a) enhance efficiency and staff productivity. b) improve TAT c) reduce costs d) improve data quality and data analytics e) mitigate risks and f) enhance customer experience.

Scope of work for the operational review

The consultants will conduct a comprehensive review of our ongoing end-to-end field operational processes and practices considering both Digital Field Applications (DFA), Core Banking System (CBS) and manual paper-based procedures. The selected consultants will be required to use diverse methodologies, including in-person focus group discussions, individual staff interviews, and a meticulous examination of existing documents, registers, questionnaires, and data points captured and reflected on DFA. This project will entail active engagement with front-end, middle management, and top management staff across multiple operational regions, spanning rural, peri-urban, and urban settings. The research methodology, including the indicative sample size, will be collaboratively determined in consultation with BIHBV and in-country management.

The specific scope of work for this assignment includes the following:

1. Review of existing end-to-end operational processes in Rwanda and Liberia: Review the current MFI’s end-to-end field operational processes, including:
   1. Client Onboarding: Review the end-to-end client onboarding processes for group lending and SEP clients on DFA and CBS platforms and recommend any possible areas for streamlining and optimising the workflow. The consultants will also review the questionnaires in use and recommend ways to streamline them, reducing the KYC documents required from clients for speedy onboarding and enhanced client convenience.
   2. Loan Origination, Verification, and Disbursement: Assess the entire loan origination and disbursement process to generate direct client and business value through efficiencies in the loan cycle and automated credit decisions at the field level. Recommend optimisations for the entire process and identify areas for improvement to ensure faster loan processing.
   3. Savings Collections and Withdrawals: Review the savings deposit and withdrawal process in BRAC Rwanda. Identify any manual processes in practice and recommend optimised processes for improving client convenience in savings deposits and withdrawals. Leverage the use of DFA (and other platforms if needed) to streamline the savings and withdrawal process to reduce TAT and improve customer experience.
   4. Payment Reconciliation Processes (Office and Field Level): Assess the existing process of capturing cash payments using DFA and the reconciliation process at the back office. Additionally, review the passbook reconciliation process at the field level. Provide recommendations for areas of improvement to strengthen operational control, enhance transparency, and build client trust.
   5. Group meeting management and attendance tracking: Examine the group meeting attendance tracking at the field and available reports on DFA. Identify any manual processes currently in practice and recommend areas for improvement to streamline the data capture and reporting process, ensuring enhanced visibility of client attendance for optimal operational monitoring.
   6. Client follow-up/CRM: Review the existing ways of following up on potential clients to increase client base in rural and hard-to-reach areas and recommend areas for improvement through digitisation. This includes providing recommendations on how the process of engaging repeat clients can be improved through digitization to enhance the customer experience.
   7. Any other processes along the credit and savings life cycle such as loan recovery, account opening among others which can be optimised through the use of a Digital Field Application solution.

Overall, the review will identify opportunities to improve business process efficiency and effectiveness through digitisation, identify any manual processes that are in practice, and recommend ways to optimise the use of the DFA platform to achieve operational excellence. The review will identify redundant steps and documentation (if any), potential efficiency gains, and an analysis of process gaps. The review will identify how to convert potential efficiency gains into increased staff productivity and how their (field and office-based) roles can be improved.

1. Review existing reports and tracking of key business performance indicators: The consultant will assess the need for diverse reports to aid staff in monitoring operational performance and in tracking client-level metrics such as social impact KPIs. The review will include assessing the sufficiency of reports on DFA and other available data analytics and reporting platforms (currently in use) to identify reporting requirements that will enhance data-driven decision-making and inform critical business areas such as staff and branch performance, client and poverty outreach, turnaround time for key processes such as member onboarding, and loan disbursement among others.
2. Review the DFA business requirements gathering process and post implementation support processes: Analyse the DFA business requirement gathering process and identify areas to improve the quality and clarity of business requirements gathered and communicated to key stakeholders including system vendors.

Based on the above review, provide Should-Be processes, reporting requirements and recommendations that will enhance operational excellence and efficiency and that can improve critical performance measures such as cost, quality, service, and speed.

Deliverables

1. DRAFT REPORT: Share a draft report that maps out should-be processes and reporting requirements, details recommendations with justifications, and provides detailed modalities for each prototype/refined process.
2. VALIDATION WORKSHOP: A validation workshop with key stakeholders to discuss initial findings, recommendations, and proposed improvement areas.
3. SUMMARY REPORT AND PRESENTATION: Prepare and present to management a summary PowerPoint presentation with final findings and recommendations.
4. FINAL REPORT: Share a final report incorporating feedback from all key stakeholders, compiling all recommendations with justifications, and provide detailed modalities for each refined process.

Key Timelines

We expect the engagement to be conducted within approximately two months commencing from the date of contract signing. The expected completion date is 29th March 2024.

Deliverable & Timeline:

1. Submission of the first draft of the report with the BIMF team for initial findings and recommendations with proper justification: 15 March 2024
2. Validation workshop with country teams with initial findings and recommendations with proper justification: 22 March 2024
3. Summary Report and Presentation to Management: 29 March 2024
4. Final Report: 1st week of April

At the conclusion of the project, all deliverables, project documents and plans must be handed over to BRAC project manager for implementation.

Qualification of the Consultant/Firm

• Experience in conducting business process reviews/business process re-engineering including experience in creating and evaluating process flows and identifying areas for improving operational excellence.
• Working knowledge of Digital Field Applications in the Financial Inclusion or Microfinance Context is Preferred
• Experience with working with microfinance institutions and an understanding of the process of digitalization of microfinance processes.
• Preferably have experience in HCD (Human-centred design) approach (or other client-centric methodologies) to understand the needs, behaviours, and motivations for staff and clients.
• Knowledge of regulatory environments of the target markets
• Strong analytical skills and ability to conduct in depth interviews and focus groups with staff and clients
• Proactive project management skills with strong attention to detail.
• Fluency in English required