Inclusive Financial Services Analysis

Introduction & background

First Consult (FC) is a leading development consulting firm based in Ethiopia, designing and implementing economic development projects in partnership with the private sector, governments and donor programmes. FC has been delivering innovative and private sector-based solutions across a range of sectors, including enterprise development, resilience, job creation, agriculture and access to finance for over 15 years. FC has worked in the finance and investment sectors since its earliest days. They have experience in designing and implementing SME finance programmers, building the capacity of finance sector personnel, designing and supporting the operations of target group-tailored financial products, research and evidence generation, facilitating private equity funding - including advisory services, and availing grant facilities through a crowdsourcing platform.

The Economic Recovery for Conflict-Affected Population Project (ER-CAP) is a five-year project aiming to improve the economic adaptation, protection, and recovery of populations affected by conflict. The programme, led by Mercy Corps in collaboration with the Danish Refugee Council (DRC) and First Consult, uses an integrated conflict-sensitive, systems-strengthening, climate-smart, and inclusive approach to enhancing systems that support the economic recovery of communities in three regions: Afar (Abaala), Tigray (Mekelle), and Amhara (Woldiya). The programme is designed to have a 9-month inception period followed by a phased implementation whereby the first two years will focus on Tigray and Afar regions and starting from year 3, it will expand to the Amhara region. The programme aims to benefit 43,540 individuals, with a specific focus on Internally Displaced Persons (IDP) and returnee women, youth, and other marginalized groups. 

The expected outcomes include resilient livelihoods, improved access to financial products and services, and enhanced capacity to mitigate protection risks through access to justice and psychosocial support. ER-CAP will support conflict-affected communities and improve their livelihoods by strengthening Micro, Small, and Medium Enterprises (MSMEs) including women and youth- led MSMEs, improving crop and livestock and other potential value chains, and facilitating access to off- farm non-farm income-generating opportunities. Our plan includes assessing relevant agricultural and non- agricultural market systems, facilitating market-driven short-term technical skills training, and improving inclusive employment opportunities through input-output market linkages and advocacy. The programme will also facilitate access and use of affordable and innovative financial products and technology for conflict-affected communities and MSMEs through strategic partnerships with financial services providers and layering on existing government initiatives, the aim is to facilitate Know-Your-Customer requirements, integrated financial literacy training, and expand mobile and agent banking. Finally, the ER-CAP

programme will enhance the protection capacity of conflict-affected communities in Afar and Tigray by establishing protection desks and information hubs, providing access to legal solutions,

psychosocial support peer support mechanisms, technical support, and coaching for marginalized groups, and conducting Gender Equality and Social Inclusion (GESI) dialogues. Additionally, it will pilot early economic recovery approaches to support vulnerable groups in displacement settings and identify viable business ideas for economic development activities.

Objectives of the study

• Understand the existing and emerging financial institutions including their services, products, and innovations.

• Understand the financial needs of IDPs, returnees, and host communities; and the needs of MSMEs in the target area, focusing on women and youth-owned MSMEs.

• Understand any legal/regulatory gaps preventing the uptake and usage of financial services and products from both a demand and supply-side perspective.

• Align and create access to financial resources for participants engaged in the value chains identified during the market systems analysis.

Scope

he Program team in Addis and field-based team members from all the consortium partners will be part of the assessment during information gathering, analysis, and intervention design.

The consultant will take the lead role in intervention design and report writing by taking into consideration the findings and recommendations from the other complementing study focusing on Market System, Political Economy Analysis, and Conflict Sensitivity Analysis that Mercy Corps has contracted in addition to the tasks listed below this ToR.

The study will be conducted in Tigray region -Mekelle city Administration and surrounding kebeles and Afar region- Aballa town and surrounding kebeles.

Deliverables

Task 1: Inclusive Financial services

Identify and map the existing and emerging financial service providers (formal, informal, semi- formal FIs, and mobile money operators) in the operational regions.

Identify and map opportunities and constraints for serving conflict-affected communities including assessing the relevance of the existing products and services that the institutions are providing currently to conflict-affected populations.

• Assess the current capacity/capabilities and challenges financial institutions face in developing new products that are attractive to MSMEs, IDPs, and returnees and protect the interests of both borrowers and lenders.

• Assess gender-based supply-side challenges and obstacles including FIs' capacity to serve the women-owned MSMEs using standard credit policies and procedures.

• Assess whether the institutions are capable and willing to develop and/or provide innovative financing tools to IDPs and returnees (E.g.: a matrix approach like the WILL-SKILL framework to identify potential).

• Provide market intelligence that would build a sound business case for FIs to profitably serve IDPs, returnees, and host communities.

• Assess the legal requirements of financial institutions by considering the ease of doing business towards the inclusion of conflict-affected populations.

• Assess the capacity-building initiatives that are required to spur IDPs, returnees, and host communities' uptake and usage of financial services from formal financial institutions.

• Assess the interest and capacity of the target groups (women, youth, and marginalized

• groups) about savings, loans, insurance, and other financial services needs to engage in economic activities.

• Assess the barriers, behaviors, and motivations of the target groups towards access and use of financial services and products.

• Assess the legal/regulatory gaps preventing these segments from the usage of formal financial services from both demand and supply-side perspectives.

• Align the inclusive financial services analysis with the market systems analysis.

• Propose potential interventions (through designing alternative financing mechanisms) for

• early recovery, tailored to the needs of the target populations with capable and willing financial institutions to improve the delivery of inclusive and innovative financial services.
   

Task 2: Cross-cutting issues: Gender Equality and Social Inclusion

• Identify the barriers or the stigma towards lending to women, youth, and other marginalized groups (people with disabilities, elders).
• Assess the current dynamics and how the post-conflict scenario affected the ability of women, youth, and other marginalized groups to access basic financial services.
• Defining interests, needs, and capacities of women, men, and youth in the conflict-affected areas
• Recognize and analyze intersecting factors such as gender, age, disability, and socio-economic status (current settlement situation, family status, economic engagement, etc.)
• Design well-integrated and gender-sensitive intervention based on the findings from Task 1.

Methodology

The assessment will deploy a qualitative survey using different tools for both primary and secondary data sources. Purposive sampling based on data saturation (collecting data from a range of different sites and stakeholders until you start receiving the same information). The data collection will consider all the operation areas including Abaala and surrounding districts and Mekelle and surrounding districts. Some of the tools proposed includes but not limited to:

• Semi-structured interviews with market stakeholders
• Semi-structured interviews with formal and informal community leaders
• Focus group discussions with community members.
• Market mapping
• Desk review from trusted sources including NGOs, Gov’t, Universities, Research outputs, and others.
•  

For more and detailed information please rifer the link https://drive.google.com/file/d/1CItRvQ30RCxXHoCBNdaEZF3iVY6GNr75/view?usp=sharing

First Consult is expected to:

• Recruit the consultant and finalize the consultancy agreement.
• Share relevant documents with the consultant.
• Provide inputs for the assessment, methodology, data collection tools, and report.
• Provide relevant arrangements to ensure that the study is conducted in the shortest time possible including facilitation of local transportation during the assessment.
• Facilitate/Support the consultant in the execution of the assessment i.e., communication with relevant stakeholders, and arranging appointments of respondents (KIIs & FGDs).
• Closely follow up the assessment process ensuring quality control, daily debriefing, and meeting timelines.
• Engage the consortium members in every step of the assessment to ensure inclusive intervention design and quick implementation immediately after the assessment is completed.

Consortium Members: Mercy Corps and Danish Refugee Council as consortium members for the ER- CAP project, will assign their staff who will work jointly with the consultant during interviews and give their inputs, technical support, and other assistance as deemed necessary including reviewing the deliverables.

How To Apply

Application Process

Eligible companies/firms must submit the following: Technical Proposal with at least

Company profile.

Statement of interest with proposed methodology and work plan.

Three testimonial letters/recommendations for a similar assignment

CVs of the proposed team members for the assignment

Copies of renewed business registration certificates. Financial Proposal with at least

detailed and with a breakdown of costs (including all related costs) and in ETB and mentioning the terms of payment.

Technical and financial proposals should be sent separately to bids2@firstconsultet.com

Failure to comply with any of the conditions indicated above will result in automatic rejection.

The application deadline is 25th of July 2024 5 PM EAT and proposals sent after this date may not be considered.

First Consult reserves the right to reject the bid fully or partially.