REQUEST FOR PROPOSAL JULY 2022, CREDIT MANAGEMENT CONSULTANCY

TERMS OF REFERENCE FOR CREDIT MANAGEMENT CONSULTANCY

1. The Africa Enterprise Challenge Fund

The AECF is a leading African-owned and led development organisation that supports innovative enterprises in the agribusiness and renewable energy sectors with the aim of reducing rural poverty, promoting resilient communities and creating jobs. AECF has raised over US$ 400 million to provide catalytic funding and technical advisory support to enterprises that struggle to meet traditional risk-return standards for commercial investors. In just over a decade, we have supported over 375 businesses in 26 countries in Sub-Saharan Africa, impacted more than 30 million lives, created over 27,000 direct jobs, and leveraged US $771 million in matching funds.

We surface and commercialize new ideas, business models and technologies designed to increase agricultural productivity, improve farmer incomes, expand clean energy access, reduce greenhouse gas emissions and improve resilience to the effects of climate change while also addressing the crosscutting themes of women, youth, and fragility. AECF is committed to working in frontier markets, fragile contexts, and high-risk economies where few mainstream financing institutions dare to go. In 2021, the AECF launched a refreshed strategy with the objective to build resilience and sustainable incomes for rural and marginalized communities in Africa.

1. About Kakuma Kalobeyei Challenge Fund (KKCF)

The KKCF is a competitive financing mechanism for disbursing donor funding to incentivize for-profit companies, social enterprises, and local and refugee entrepreneurs to start or scale existing operations in the Kakuma-Kalobeyei area. Attracting the private sector to the area and supporting local entrepreneurs has the potential to expand job opportunities, improve services, provide more choice, and reduce prices. This will, in turn, enhance the self-reliance and socioeconomic integration of both refugee and host communities, while also contributing to the development of Turkana County. KKCF is a program of International Finance Corporation (IFC) and AECF is the implementing partner.

1. About the assignment
2. 1. Purpose of the assignment

AECF is seeking the services of a consultant to support one of AECF’s investee companies in the Kakuma-Kalobeyei area in Kenya to set up a credit management system and processes that are customized to the company’s new market (Kakuma/Kalobeyei market – refugee setting). A system and procedures that are capable of crowding in more women and youth as beneficiaries/clients of this investee company. The assignment will commence with a comprehensive review of the company’s target clients, the current credit policies and procedures, and the existing credit appraisal skills/capacity and end with a fit-for-market credit policy, framework, manuals and staff training in credit and risk assessment for MSME lending in this market.

The investee company is a non-deposit-taking microfinance institution that provides different loan products targeting rural and peri-urban regions in Kenya. Kakuma/Kalobeyei region is a new market that they are expanding into. The consultant must demonstrate experience and understanding of this sector and the refugee context.

1. 1. Specific duties and responsibilities (the “Services”) of the consultant

The consultant will work with the company’s team to deliver on the following scope of the assignment.

1. Review the company’s credit procedures, policies, and capacity of the staff to provide inclusive financial services in the context of the Kakuma/Kalobeyei market.
2. Develop a fit-for-purpose credit management framework and corresponding manuals, tools and guidelines for loan origination, assessment and administration customized for the market.
3. Develop appropriate training and capacity-building material (decks, templates, tools) to improve staff skills in credit risk assessment and credit management
4. Deliver hands-on, on-the-job training for selected credit and risk officers
5. Develop metrics and tools to track and evaluate improvements made in the implementation of the credit management system
6. Prepare and submit a report presenting insights from this assignment, especially with regard to credit management in refugee and other fragile market contexts
7. 1. Specific deliverables

The deliverables/outputs for this assignment are outlined below:

1. A gap analysis report for the company’s existing credit policies, procedures and staff capacities to provide financial services in the context of the Kakuma/Kalobeyei market. This report will include recommendations on how to improve existing credit management policies or develop a completely new policy.
2. Tools for credit and risk assessment for lending to productive sectors that target the KKCF end clients, especially women and youth.
3. A credit management strategy that has a clear path to the sustainability of the business model in the Kakuma/Kalobeyei context
4. A training and capacity-building program and training materials for use by the investee company for onward refresher training decks for their teams
5. Metrics and tools to track and evaluate improvements made in the implementation of the credit management system over time
6. An insights paper from this assignment
7. 1. Duration of the assignment

The assignment is expected to commence in July 2022 and end in August 2022.

1. Qualifications and experience

The minimum competencies and qualifications include:

1. Master’s degree in Business Administration, finance or related field for the Team lead.
2. Professional certification in areas such as credit management will be an added advantage.
3. Good analytical and presentation skills
4. Experience in developing credit management frameworks and manuals for SMEs, preferably microfinance institutions.
5. Experience in training teams and developing effective credit management policies and procedures
6. Experience with supporting microfinance institutions in fragile/refugee economies is a good advantage.
7. Reporting

The consultant will report to the Advisory Manager.

1. Proposal submission

Qualified consultants are invited to submit a proposal that includes the following:

1. Qualification and experience of the team.
2. Approach and methodology to undertake this assignment underpinned by a demonstration of value for money.
3. Previous experience in similar assignment(s) with SMEs, including if any, those in non-deposit taking microfinance institutions.
4. A detailed financial budget (in USD ) and work plan.
5. The technical and financial proposals will need to be submitted as separate documents.

7.0 Pricing

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 with regards to provisions of Kenya tax legislation when developing their proposals.

8.0 Evaluation Criteria

An evaluation committee will be formed by the AECF and may include employees of the businesses to be supported. All members will be bound by the same standards of confidentiality. The consultant should ensure that they fully respond to all criteria to be comprehensively evaluated.

The AECF may request and receive clarification from any consultant when evaluating a proposal. The evaluation committee may invite some or all the consultants to appear before the committee to clarify their proposals. In such event, the evaluation committee may consider such clarifications in evaluating proposals.

In deciding the final selection of qualified bidder, 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.

Key Areas for Evaluation/ Assessment

Weighted Award

(A) TECHNIAL PROPOSAL

70

i) An understanding of the consultancy requirements;

10

ii) Methodology/strategy and work-plan that will deliver the best value for the assignment:

20

iii) Relevant and comparable services undertaken by the bidder in past engagements:

30

iv) Detailed reference list indicating the scope and magnitude of similar assignments and at least 2 signed Letters of reference from past customers or associates to the consultant:

10

(B) FINANCIAL PROPOSAL

30

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

10.0 Disclaimer

AECF reserves the right to determine the structure of the process, 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.