REQUEST FOR PROPOSAL OCTOBER 2022-CONSULTANCY SERVICES TO DO A MID-TERM EVALUATION FOR THE FINANCE FOR INCLUSIVE GROWTH (FIG)-SOMALIA

TERMS OF REFERENCE

1. BACKGROUND

The AECF is a development institution that supports businesses to innovate, create jobs, and leverage investments and markets to create resilience and sustainable incomes in rural and marginalized communities in Africa. To date, AECF has supported 384 businesses in 26 countries in sub-Saharan Africa. In the agribusiness sector, it has supported businesses across different value chains from improving seed varieties to livestock vaccines and introducing new farming systems and agribusiness models. In the renewable energy and adaptive climate change sector, we have supported businesses across home solar systems, mini and microgrids, biogas, financial services, and adaptive climate change technologies.

1. ABOUT THE FINANCE FOR INCLUSIVE GROWTH (FIG) – SOMALIA PROGRAM

Finance for Inclusive Growth in Somalia (FIG –Somalia) is a pilot programme component under the European Union-funded Inclusive Local and Economic Development (ILED). This programme’s objective is to contribute to stability in Somalia by extending state authority and services, promoting local reconciliation and peacebuilding, creating inclusive economic opportunities, and protecting the most vulnerable. FIG Somalia seeks to work through two participating financial institutions (Microdahab and Islamic Bank of Somalia) to fill a financing gap in Somalia/Somaliland by providing them with access to a revolving fund for access to on-lending capital to women and youth in business and producers[1].

The programme 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[2] through:

1. Designing and offering appropriate and sustainable financial products and services to clients through two Somali Financial Institutions (FI) and ensuring targeted clients are growing and becoming more bankable.
2. Catalyzing sustainable increase in lending to economic actors in Somalia, esp. youth, women, and producers.
3. 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.
4. Building the capacity of targeted end clients to profitably use the financing for business growth.

Each of the two financial intermediaries received €1m as a revolving fund for on-lending in Jubaland (Kismayo), Southwest State (Afgoye), Galmudug (Dhusamareeb & Adado), Hirshabelle (Beledwayne & Balcad), Puntland (Bossaso, Garowe & Galkaio), Somaliland (Hargeisa, Borama, Gabilay, Wajale, Berbera, Bur’o, Erigavo, Las’anod and Buhodle) and Banadir (Mogadishu). The three major components of the program are the revolving fund, partial guarantee fund and technical assistance to the bank staff and clients.

1. PURPOSE FOR THE EVALUATION

The purpose of the FIG-Somalia midterm evaluation is to review the project’s implementation and propose any correct management actions for the remaining period of implementation. The evaluation should assess or identify:

1. The investees’ use of AECF investment funds and the pre-and post-investment performance of the banks.

2. Whether targeted beneficiaries are receiving access to finance as expected, and if not, why.

3. Whether the programme is on track to meeting its stated results including the outputs, outcomes, and program objectives.

4. The development impact generated by borrowers from the use of funds made available by the programme.

5. Initial lessons learned on:

   1. Substantial microfinance practices in alignment with Islamic finance principles
   2. Risk management of lending in Somalia
   3. Support provided or required to mitigate risk

6. Necessary changes may be required to meet the programme goals.

7. KEY EVALUATION QUESTIONS

• To what extent has the programme design supported the increased access to finance for women and young people in productive sectors in Somalia?
• Have the financial intermediaries disbursed the funding made available?
• Who has been reached with the concessional financing?
• Has the technical assistance training provided to the bank staff been effective in addressing identified capacity gaps?
• Has the technical assistance provided to end beneficiaries improved business performance and improved repayment rates?
• What have been the development impacts achieved to date for the various categories of beneficiaries, particularly on the number of jobs created and the average income generated per beneficiary?
• Is the programme on course to generate the development impact for end beneficiaries expected?
• How has the programme impacted the business performance of the two financial intermediaries? This should focus on their revenues, profits, jobs, branches, geographic coverage, products, technology, etc.
• To what extent has the programme been impacted by government policies affecting lending in Somalia, and what can be done by the EU and other stakeholders to improve the financial business environment?
• Has loan default guarantee facilitated the banks to venture into new sectors with their funds?

1. EVALUATION AUDIENCE

• The AECF LLC
• The European Union
• IBS Bank
• MicroDahab MFI

1. METHODOLOGY

Applicants are invited to propose a methodology for the assignment that aligns with good evaluation practice, including the use of evaluation tools (evaluation matrix, reconstructed intervention logic etc) and statistically robust field research methods. The evaluation should include both desk and field phases and will require primary data collection at the beneficiary level in Somalia/Somaliland. Work undertaken in Somalia will need to reflect the security challenges that exist in the country. Whilst AECF and its partners will be able to facilitate the evaluation, the applicants should be able to engage independently in all aspects of field research.

1. SCOPE OF WORK

The consultant will:

• Review and analyze the programme documentation (contract, logical framework, results measurement plans, indicators, targets, investee progress reports) to create an evidence base for the implementation of the programme to date, including identification of data gaps.
• Carry out field visits to the two financial intermediaries in Somalia and beneficiaries to collect data and information on both the capacity building and beneficiary financing aspects of the programme.
• Work with the AECF gender expert to understand the extent to which the programme is gender inclusive and propose corrective actions to improve this if necessary.
• Draft a comprehensive analysis and evaluation report that presents the progress of the programme to date identifies challenges and proposes solutions for the remaining implementation period.
• Conduct a stakeholder meeting/workshop in Nairobi to present the findings of the evaluation and discuss specific recommendations for the FIG-Somalia programme.

1. DELIVERABLES
2. Inception report outlining the approach for the evaluation, including tools to be deployed and stakeholder engagement processes, preliminary data analysis from the desk research and a work plan for the remainder of the assignment.
3. A comprehensive evaluation report, including findings, conclusions, and recommendations for future actions
4. Stakeholder workshop presentation deck.
5. DURATION OF SERVICE

The assignment should be completed by the end of 2022.

1. REPORTING

The consultant will be accountable to AECF, Head of Impact

1. QUALIFICATIONS.

The selected consultant firms should meet or exceed the following minimum qualifications:

• A banking specialist with 8-10 years’ extensive experience in agricultural value chains analysis, and women and youth integration in programmes, with substantial experience in private sector development.
• At least 5 years of practical experience in conducting market assessments, stakeholder, and data analysis; stakeholder consultations, human-centred design, and programme design in the development sector.
• Good knowledge and understanding of the Somalia financial sector, with in-country survey capacity among the team members.
• Good knowledge and understanding of SME finance and solutions to increase access to finance for women-owned/led businesses.

1. PROPOSAL SUBMISSION

Interested and qualified consultants are invited to submit their proposal(s) comprising the following:

• An understanding of the consultancy requirements.
• Methodology and work plan for performing the assignment.
• Detailed reference list indicating the scope and magnitude of similar assignments.
• Relevant services that have been done in the past five (5) years.
• Signed letters of reference from 3 previous companies/assignments.
• Registration and other relevant statutory documents (applicable to firms).
• The technical and financial proposals are to be submitted separately.
• The financial proposal clearly shows the budgeted cost for the work to be conducted by the consultant under the scope of work above.

1. PRICING

Dependent 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.

Evaluation Criteria

Marks

Understanding of the Terms of Reference

15

Methodology and work – plan for performing the assignment

20

Demonstration of experience in similar work

20

Detailed reference list indicating the scope and magnitude of similar assignments

15

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

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.

[1] Refers to farmers, fishermen, pastoralists, and auxiliary small businesses along the value chains, e.g., fish shop, transporter, processing activity etc.